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THE FIVE REPUBLICS OF 
CENTRAL AMERICxl 



Carnegie Endowment for International Peace 

DIVISION OF ECONOMICS AND HISTORY 
John Bates Clark, Director 



THE FIVE REPUBLICS 

OF 

CENTRAL AMERICA 

THEIR POLITICAL AND ECONOMIC 
DEVELOPMENT AND THEIR RELA- 
TIONS WITH THE UNITED STATES 

By DANA G. MUNRO 



EDITED BY 

DAVID KINLEY 

Professor of Political Economj in the University of Illinois 



NEW YORK 
OXFORD UNIVERSITY PRESS 

AMERICAN BRANCH: 85 West 32iid Strbet 
LONDON. TORONTO. MELBOURNE, AND BOMBAY 

1918 



COPYEIGHT 1918 

BT THB 

CAKNEGIB ENDOWMENT FOR INTERNATIONAL PEACE, 
Washinston, D. C. 



( 






MAR -3 i3l8 



V 



INTRODUCTORY NOTE BY THE DIRECTOR 

The Division of Economics and History of the 
Carnegie Endowment for International Peace is organ- 
ized to " promote a thorough and scientific investigation 
of the causes and results of war." In accordance with 
this purpose a conference of eminent statesmen, pub- 
licists, and economists was held in Berne, Switzerland, 
in August, 1911, at which a plan of investigation was 
formed and an extensive list of topics was prepared. 
It will be seen that an elaborate series of investigations 
was undertaken and, if the war had not intervened, the 
resulting reports might have been expected, before the 
present date, in printed form. 

Of works so undertaken some aim to reveal direct and 
indirect consequences of warfare, and thus to furnish a 
basis for a judgment as to the reasonableness of the resort 
to it. If the evils are in reality larger and the benefits 
smaller than in the common view they appear to be, such 
studies should furnish convincing evidence of this fact and 
afford a basis for an enlightened policy whenever there is 
danger of international conflicts. 

Studies of the causes of warfare reveal, in particu- 
lar, those economic influences which in time of peace 
bring about clashing interests and mutual suspicion and 
hostility. They show what poHcies, as adopted by dif- 
ferent nations, reduce the conflicts of interest, inure to 
the common benefit, and afford a basis for international 
confidence and good will. They tend, further, to reveal 
the natural economic influences which of themselves bring 
about more and more harmonious relations and tend to 



vi INTRODUCTORY NOTE 

substitute general benefits for the mutual injuries that 
follow unintelligent self-seeking. Economic interna- 
tionalism needs to be fortified by the mutual trust that 
just dealing creates; but just conduct itself may be 
favored by economic conditions. These, in turn, may 
be created partly by a natural evolution and partly by 
the conscious action of governments; and both evolution 
and public action are among the important subjects of 
investigation. 

An appeal to reason is in order when excited feelings 
render armed conflicts imminent; but it is quite as surely 
called for when no excitement exists and when it may 
be forestalled and prevented from developing by sound 
national policies. To furnish a scientific basis for rea- 
sonable international policies is the purpose of some of 
the studies already in progress and of more that will 
hereafter be undertaken. 

The war has interrupted work on rather more than a 
half of the studies that were in progress when it began, 
but it has itself furnished topics of immediate and tran- 
scendent importance. The costs, direct and indirect, of 
the conflict, the commercial policies induced by it and, 
especially, the direct control, which because of it, govern- 
ments are now exercising in many spheres of economic 
activity where formerly competition and individual free- 
dom held sway, are phenomena that call, before almost 
all others, for scientific study. It is expected that most 
of the interrupted work will ultimately be resumed and 
that, in the interim before this occurs, studies of even 
greater importance will be undertaken and will be pushed 
rapidly toward completion. 

The publications of the Division of Economics and 
History are under the direction of a Committee of Re- 
search, the membership of which includes the statesmen, 
publicists, and economists who participated in the Con- 
ference at Berne in 1911, and two who have since been 
added. The list of members at present is as follows: 



INTRODUCTORY NOTE vii 

EuGiiNE BoREL^ Profcssor of Public and International 
Law in the University of Geneva. 

Lujo Brentano/ Professor of Economics in the 
University of Munich; Member of the Royal Bavarian 
Academy of Sciences. 

Charles Gide^ Professor of Comparative Social Eco- 
nomics in the University of Paris. 

H. B. Greven, Professor of Political Economy and 
Statistics in the University of Leiden. 

Francis W. Hirst, London. 

David Kinley, Professor of Political Economy in the 
University of Illinois. 

Henri La Fontaine, Senator of Belgium. 

His Excellency LuiGi Luzzatti, Professor of Con- 
stitutional Law in the University of Rome; Secretary 
of the Treasury, 1891-3; Prime Minister of Italy, 
1908-11. 

GoTARo Ogawa, Professor of Finance at the Uni- 
versity of Kioto, Japan. 

Sir George Paish, Joint Editor of The Statist, 
London. 

Maffeo Pantaleoni, Professor of Political Economy 
in the University of Rome. 

Eugen Philippovich von Philippsberg/ Professor 
of Political Economy in the University of Vienna ; Mem- 
ber of the Austrian Herrenhaus, Hofrat. 

Paul S. Reinsch, United States Minister to China. 

His Excellency Baron Y. Sakatani, recently Minister 
of Finance; Present Mayor of Tokio. 

Theodor Schiemann/ Professor of the History of 
Eastern Europe in the University of Berlin. 

Harald Westergaard, Professor of Political Science 
and Statistics in the University of Copenhagen. 

* Membership ceased April 6, 1917, by reason of the declaration of a state 
of war between the United States and the Imperial German Government. 

* Died, June, 1917. 



viii INTRODUCTORY NOTE 

Friedeich, Freiherr von Wieser, Professor of Po- 
litical Economy at the University of Vienna. 

The function of members of this Committee is to select 
collaborators competent to conduct investigations and 
present reports in the form of books or monographs; 
to consult with these writers as to plans of study; to 
read the completed manuscripts, and to inform the officers 
of the Endowment whether they merit publication in its 
series. This editorial function does not commit the mem- 
bers of the Committee to any opinions expressed by the 
writers. Like other editors, they are asked to vouch for 
the usefulness of the works, their scientific and literary 
merit, and the advisability of issuing them. In like 
manner the publication of the monographs does not 
commit the Endowment as a body or any of its officers 
to the opinions which may be expressed in them. The 
standing and attainments of the writers selected afford 
a guarantee of thoroughness of research and accuracy in 
the statement of facts, and the character of many of the 
works will be such that facts, statistical, historical, and 
descriptive, will constitute nearly the whole of their con- 
tent. In so far as the opinions of the writers are revealed, 
they are neither approved nor condemned by the fact 
that the Endowment causes them to be published. For 
example, the publication of a work describing the attitude 
of various socialistic bodies on the subject of peace and 
war implies nothing as to the views of the officers of the 
Endowment on the subject of socialism; neither will the 
issuing of a work, describing the attitude of business 
classes toward peace and war, imply any agreement or 
disagreement on the part of the officers of the Endow- 
ment with the views of men of these classes as to a pro- 
tective policy, the control of monopoly, or the regulation 
of banking and currency. It is necessary to know how 
such men generally think and feel on the great issue of 
war, and it is one of the purposes of the Endowment to 
promote studies which will accurately reveal their atti- 



INTRODUCTORY NOTE ix 

tude. Neither it nor its Committee of Research vouches 
for more than that the works issued by them contain such 
facts; that their statements concerning them may gen- 
erally be trusted, and that the works are, in a scientilfic 
way, of a quality that entitles them to a reading. 

John Bates Clark, 

Director, 



EDITOR'S PREFACE 

This volume by Dr. Dana G. Munro on the history 
and economic conditions of the five Central American 
Republics was undertaken for the Carnegie Endowment 
for International Peace as one of a series of studies 
intended to present similar conditions in others of the 
Latin American Republics. The general purpose of the 
studies is to acquaint our own people with conditions as 
interpreted by a student and critic from among ourselves, 
in order that we may get a better and more sympathetic 
understanding of the ideals and conditions of life of our 
Central and South American neighbors. It is our hope 
also that such presentation may be helpful to the peoples 
of these countries themselves as a sympathetic attempt 
by friends to understand them and to let them see how 
things appear through the eyes of friendly outsiders. 

Dr. Munro's volume is the result of several months 
of study on the ground. He traveled by all the usual 
means of locomotion through the countries he describes, 
getting his information, as far as possible, at first hand. 
His account may be relied on as a correct presentation 
of the life of the people as seen by an outsider. 

Nothing is more desirable in American international 
relations than a better understanding and closer cooper- 
ation among the peoples of the western hemisphere. 
The more we know about one another's difiiculties, 
sympathies, and ideals, the better friends we shall all 
be, the more ready to make allowances for one another's 
shortcomings, and the better able to appreciate one 

another. 

David Kinley, 

Editor, 



AUTHOR'S PREFACE 

By many persons in the United States, Central 
America is conceived of chiefly as a land of revolutions, 
bankrupt governments, and absconding presidents, and a 
haven for fugitives from justice from more settled coun- 
tries. The progress of the people of the Isthmus since 
their declaration of independence, and the significance of 
this progress in view of the difficulties with which they 
have had to contend, are rarely recognized. The fact is 
too frequently overlooked that the greater part of the 
people of the five republics, except in Costa Rica, are 
descendants of the semi-civilized aboriginal tribes whom 
the Conquistador es enslaved in the sixteenth century, and 
that these Indians still remain, for the most part, in a 
condition of dense ignorance and economic dependence. 
Even the white upper classes were prevented for three 
centuries from making any advance in civilization by the 
restriction of intercourse with other countries and the 
centralization of authority in the hands of foreign officials, 
under the Spanish colonial system; and they were unable 
to set up a stable political system when they obtained 
their independence, because of their lack of experience in 
self-government, and because of the absence of political 
institutions upon which a stable system of government 
could be based. 

When we take these facts into consideration, and 
when we see the advances which some of the Central 
American Republics have been able to make despite these 
handicaps, we shall be less ready to conclude that their 
people are inherently unfit for self-government. Our 
own race is removed from the disorderly conditions which 
characterize the more turbulent parts of the Isthmus only 

xiii 



xiv AUTHOR'S PREFACE 

by a few hundred years, and in the United States we are 
not unfamihar today with evils similar to some of the 
worst evils of Central American political life. There is 
no reason to suppose that all of the five republics will 
not eventually develop stable governments, as some of 
them have already done. Although conditions in many 
parts of the Isthmus are still very bad, they are gradually 
being overcome by the efforts of the better elements 
among the ruling classes and by the gradual progress of 
the common people. Since the Washington Conference 
of 1907, moreover, the preservation of internal and inter- 
national peace in the Isthmus has been powerfully aided 
by the infiuence of the United States. 

That the economic and political conditions of Central 
America and the other countries of the Caribbean should 
be understood by the American government and the 
American people is of the utmost importance. The 
policy of the United States, more perhaps than any other 
factor either external or internal, will determine the 
course of the development of the five republics during 
the next few decades, and if this policy is to be beneficial, 
it must be based on knowledge and must be controlled 
by an intelligent public opinion. Only injustice can 
result from the publication of works like many of the 
recent superficial descriptions of Central America, 
whether they portray the five countries as foci of con- 
tinual disorder, constitutionally incapable of self-govern- 
ment, and hence destined to absorption by a stronger 
power, or paint a ridiculously laudatory picture, based on 
ofiicial reports and on the utterances of the authorities 
rather than on critical observation. It is the purpose of 
this study to describe conditions simply as they appeared 
±0 the author during a sojourn of two years in the 
Isthmus, with the object of setting forth what the people 
of Central America have achieved since their declaration 
of independence and what problems confront them in 
their present stage of development. 



AUTHOR'S PREFACE xr 

The difficulties in the way of a careful study of the his- 
torj' and the economic and political conditions of the five 
republics are verj' great., because there is so Httle trust- 
worthy written material. Historical works are especially 
unsatisfactory. The colonial period is ably treated in 
two or three books by Central American authors, but the 
development of the community since its separation from 
Spain, and the far-reaching economic and political 
changes which have taken place during the last century, 
have apparently never been studied by anyone who was 
equipped by historical training and by a knowledge of 
the country to interpret them. In attempting to obtain 
material for sketching the historical development of the 
Isthmus, therefore, I have been forced to rely on the 
very inadequate histories which do exist, which are little 
more than lists of presidents and revolutions, and upon 
a large number of political pamphlets, government docu- 
ments, and memoirs of Central American leaders and of 
early travelers in the Isthmus. Much of this material is 
all but worthless because of the ignorance or the ulterior 
motives of the writers, but there is enough of value to 
reveal certain broad tendencies of economic and political 
development. 

It is equally difficult to secure data concerning the 
condition of the countri' at present. Official publications 
can rarely be accepted as reliable because of the careless- 
ness with which records are kept and statistical data are 
gathered by most of the departments, and because official 
statements about the material progress of the country' 
and the activities of the authorities too often represent 
patriotic aspirations rather than accomplished facts. The 
differences in the use of terms and in standards of public 
service, moreover, are so great that it is difficult for a 
foreigner to obtain an idea of the actual situation in one 
of the countries merely by conversation with the authori- 
ties and other persons in the capital. The writer found 
it extremely helpful to supplement such conversations 



xvi AUTHOR'S PREFACE 

with trips to the provincial towns and through the rural 
districts. An acquaintance with the life and the char- 
acter of the people outside the somewhat Europeanized 
cities, and an observation of the actual working of the 
political machinery, did much to make clear many things 
which otherwise might have been difficult to understand. 
The courtesy of the officials of the five governments, 
and the hospitality extended to the traveler by all classes 
of the people, make a journey through Central America 
an experience upon which one can always look back with 
keen pleasure. It would be impossible here to thank 
individually the many friends who helped to make my 
stay in the Isthmus both pleasant and profitable. Never- 
theless, I wish to express especially my appreciation of 
the assistance which I have received from Dr. L. S. Rowe, 
Mr. John M. Keith, Senor Luis Anderson, Senor Manuel 
Aragon, Mr. Boaz Long, Mr. and Mrs. Arthur Jones, 
General Luis Mena, Mr. and Mrs. Wilham Owen, Pro- 
fessor Philip M. Brown, Senor Francisco Castro and 
Dona Fidelina de Castro, Dr. Escolastico Lara, Dr. 
Juan B. Sacasa, Dr. Louis Schapiro, and General Jose 
Maria Moncada. Without their assistance, it would 
have been impossible to secure the information upon 
which this study is based. 



CONTENTS 

CHAPTER PAGE 

I. The Country and the People . . 1 

II. Central American Political Institu- 
tions .24 

III. Guatemala 50 

IV. Nicaragua 72 

V. Salvador 99 

VI. Honduras . 119 

VII. Costa Rica 138 

VIII. The Establishment of a Central Amer- 
ican Federation ..... 164 

IX. The Causes of Central American 

Revolutions 185 

X. The Washington Conference of 1907 . 204 

XI. The Intervention of the United States 

IN Nicaragua 227 

XII. Commerce 265 

XIII. Central American Public Finance . 284 

XIV. The Influence of the United States in 

Central America 303 

Bibliography 321 

Index 327 



CHAPTER I 
THE COUNTRY AND THE PEOPLE 

Physical Features — Character of the Population — The Land-owning and 
Laboring Classes: Their Mode of Life and Personal Characteristics — Factors 
Which Have Retarded Economic Development — Agricultural Products — For- 
eign Immigration and Investments. 

Guatemala, Salvador, Nicaragua, Honduras, and 
Costa Rica, the five Republics of Central America, occupy 
a narrow strip of land between the Atlantic and Pacific 
Oceans, extending East and South from Mexico to the 
Isthmus of Panama. Although their combined area is 
smaller than that of the state of California,^ they com- 
prise many regions of strikingly different climatic condi- 
tions, for the mountains which occupy the greater part of 
their territory cause variations in the distribution of rain- 
fall, and also provide plateaus and high valleys where 
the tropical heat is less intense because of the altitude. 
Along the shore of the Caribbean Sea there is a broad 
strip of country but little above sea level. This has 
remained almost uninhabited until recently because of its 
intense humidity and suffocating temperature, but within 
the last twenty-five years it has become of great economic 
importance, at least to the outside world, through its 
exports of bananas. The lowlands extend inland to the 
Central American Cordillera, a series of ranges which 

^ The estimated area and population of the five countries, as given in 
the Statesman's Year Book for 1916, are: 

Area. Papula tion. 

Guatemala 48,290 square miles. 2,003,579. (1915) 

El Salvador 7,225 " " 1,225,835. (1914) 

Nicaragua 49,200 " " 703,540. (1914) 

Honduras 44,275 " " 562,000. (1914) 

Costa Rica 23,000 " " 420,179. (1915) 

171,990 4,915,133 



2 THE FIVE REPUBLICS 

grow higher and higher as they approach the Pacific 
Ocean, until they culminate in a great chain of volcanic 
peaks which traverses the Isthmus from the Mexican 
boundary to that of Panama. It is near these peaks, 
where the decomposed lava from past eruptions has 
created a marvelously fertile soil, and where the climate, 
with copious but not excessive rains during six months 
of the year, is healthful and favorable to agriculture, that 
the great majority of the people of Central America live. 
Almost all of the more important cities and towns are 
situated either in the mountain valleys, at an altitude of 
from two to seven thousand feet, where the temperature 
rarely exceeds eighty degrees Fahrenheit, or in the hot, 
but dry and therefore comparatively healthful plain 
between the base of the volcanoes and the Pacific Ocean. 

Populous and partially civilized Indian communities 
had existed in this part of America for centuries before 
the Spanish conquest, and their descendants form the bulk 
of the population of the five republics. Although the 
original inhabitants were almost exterminated in many 
districts by the oppression and mistreatment of the early 
colonists, enough remained to become the predominant 
racial element in the conglomerate population, Spanish 
in language and religion but Indian in civilization and 
standards of living, which arose from the fusion of the 
invaders, the aborigines, and the negroes who were 
brought in as slaves or escaped to the mainland from the 
West Indies. This was especially true of the three central 
countries of the Isthmus, and the development of these 
has therefore been somewhat different from that of Costa 
Rica, where the white stock predominates even among the 
common people, and from that of Guatemala, where the 
pure-blooded Indians are still a distinct and separate 
race. 

Although the Central American countries are theoreti- 
cally democracies, there is in each a small, powerful upper 
class, consisting of the so-called " principal families.'* 



OF CENTRAL AMERICA 3 

These are for the most part descendants of the prominent 
Creole ^ families of colonial days, and are therefore in 
many cases of pure or almost pure Spanish descent. A 
large proportion, — perhaps the majority, — however, have 
more or less Indian and even negro blood in their veins. 
This class has been able to maintain its dominant position 
in the community, partly because of its command of the 
government, which it assumed when the republican insti- 
tutions which the Isthmian patriots attempted to intro- 
duce after the declaration of independence were found to 
be unworkable because of the ignorance of the mass of 
the people, but more especially because of its control over 
agriculture. At the time of the conquest, the land, like 
everything else in the invaded territory, was treated as 
the property of the crown, and that in the neighborhood 
of the Spanish settlements was divided among the colo- 
nists by the royal governors. Further large allotments 
were made from time to time during the colonial period. 
After the declaration of independence, the governments 
of the several republics continued to regard as state 
property all land not already specifically granted, and 
sold or gave away large tracts of it to rich natives or 
foreigners, notwithstanding the fact that much of the 
pubhc domain was already occupied by peasants who 
had always considered the patches which they cultivated 
as their own. The number of large holdings has been 
further increased in some of the republics by the division 
of the common lands formerly held by each village among 
the village's inhabitants; for the beneficiaries have often 
sold their shares to their wealthier neighbors. At the 
present time a comparatively small number of persons 
own a very large amount of agricultural property, and 
employ the majority of the other inhabitants of the 
Isthmus as workmen on their plantations. The economic 
and political power of this class would manifestly be very 

^ The word Creole is used in the Spanish-American sense, to signify a 
person of Spanish descent born in America. 



4 THE FIVE REPUBLICS 

great even if it were not supported by their prestige as 
the descendants of the conquering race. 

Although their wealth is entirely agricultural, the 
" principal families " invariably reside in the cities. They 
make frequent visits to their plantations, which they 
intrust to the care of overseers, but the majority of 
them show a marked aversion both to country life and 
to rural pursuits. As a whole they are neither very 
enterprising nor very energetic. Those who do not 
inherit a plantation which produces an income sufficient 
to support them turn to one of the already overcrowded 
learned professions rather than to the development of 
the natural resources of their countries, in the exploita- 
tion of which foreigners are daily making fortunes before 
their eyes. Nearly every member of the upper class, 
moreover, is actively engaged in politics, often to the 
exclusion or to the detriment of his other occupations. 

The wealthier families live in one or two story houses 
of adobe or concrete, which cover a surprisingly large 
extent of ground but have little pretension to architec- 
tural beauty or to comfort. These are built around two, 
and often three, courtyards or patios. The front patio, 
upon which open the sola, or parlor, and the bedrooms, 
generally contains an attractive garden surrounded by 
an open corrector, which serves as living room and dining 
room. At the rear are the kitchen, stable, and servants' 
quarters. The standard of living, especially in the less 
advanced countries, is still rather primitive. Furniture 
and food are of a very simple character, and the servants, 
of whom each family employs a large number, are un- 
trained and inefficient. The band concerts three or four 
times a week, the cinematographs, and occasional cheap 
operettas offer almost the only opportunity for diver- 
sion, except on the very unusual occasions when a 
government subsidy makes possible a short season of 
opera or drama. Social events are comparatively few. 
In every city there are two or three civic fiestas during 



OF CENTRAL AMERICA 5 

the year, when the native society abandons itself to a 
round of dancing, horse-racing, and other gayeties, but 
at other times the capitals of the Isthmus are decidedly 
dull. Life in them has, however, a peculiar charm for 
the foreigner, because of the kindliness and friendliness 
of the people. 

Since the building of the railways and the increase of 
commerce have brought the Central American countries 
into closer touch with the outside world, there has been 
a great change in customs and ways of living in such 
places as Guatemala, San Salvador, and San Jose de 
Costa Rica. The high price of coffee during the last 
decade of the nineteenth century brought about an era 
of prosperity such as the rather backward communities 
of the Isthmus had never before known. Elaborate 
private residences and costly public buildings were 
erected in the national capitals, and pianos, window 
glass, modern furniture, and other articles which had 
formerly been little used, were imported from Europe 
in great quantities. After the reaction which set in 
when the value of coffee in the world's markets declined, 
the new standard of living remained, and even the 
poorer members of the upper classes now enjoy most 
of the comforts and many of the luxuries of modern 
civilization. The tendency to adopt European and 
North American customs is greatly furthered by the 
young people, who in increasing numbers are sent abroad 
to school and college, for they return with new tastes 
and new ways of thinking even when they do not acquire 
a great amount of learning. 

Although the members of the upper class are for the 
most part descendants of the conquistador es, social and 
political prominence is today no longer entirely a matter 
of birth. The old Creole families formed a narrow and 
exclusive circle until the latter part of the nineteenth 
century, but as a result of factional wars among them- 
selves and against other portions of the community. 



6 THE FIVE REPUBLICS 

they have now become generally impoverished and 
almost exterminated. A new element, recruited from 
Ihe more intelhgent and ambitious members of the lower 
classes, has meanwhile achieved a large amount of politi- 
cal power, and has perforce been admitted to a position 
almost of equality with the old aristocracy. At the 
present time, humble birth in itself is no obstacle to 
advancement, although educational opportunities are so 
limited, and the part played by family influence and 
favoritism is so great, that only the most capable and 
energetic boys from the lower classes can hold their own 
with those to whom the accident of birth has given 
powerful friends and greater opportunities for study. 

The half-breeds, known as ladinos or mestizos, occupy 
an intermediate position between the white aristocracy 
and the great mass of the laboring population, in which 
the Indian blood predominates. For the most part these 
are artisans, or skilled laborers, in the towns. They are 
generally clever workmen, enterprising and quick to 
learn, but without the capacity to work steadily and 
diligently for any one object. They occupy practically 
all of the positions which call for manual dexterity or 
special training. Many become more prominent than 
the persons of pure Spanish descent in the public schools 
and universities, and not a few rise to high positions in 
the government or in the learned professions. 

In each of the five republics there are some small 
farmers, who are for the most part descendants of the 
early Spanish colonists. These are the leading citizens 
of the smaller towns and villages. They do not always 
have property of their own, but often cultivate fields 
allotted to them by the municipalities of which they are 
citizens. The new settlements which were founded from 
Xivae to time during the colonial period were given tracts 
of land, usually a league square, to be used in common 
by their inhabitants, one part as pasture, another as 
forest, and a third to be apportioned each year among 



OF CENTRAL AMERICA 7 / 

the members of the community. Similar grants were 
made to many of the Indian villages and tribes, which 
in some cases received a title to much larger tracts than 
their white neighbors. These common lands still exist 
in all of the repubhcs, but the number of villages which 
hold them has been greatly reduced because some of the 
governments, as in Costa Rica and Guatemala, have 
enacted laws dividing them among the inhabitants, in 
the hope of stimulating private enterprise. The prop- 
erty thus apportioned, as we have stated above, was 
frequently sold to the rich planters, especially in the 
districts where the climate was suited to the cultivation 
of coffee, and the former owners became part of the class 
of landless laborers. Even where this has not occurred, 
the smaller villages have in most places decayed because 
of the emigration of their inhabitants to the cities and 
to the coffee-growing centers. The small-scale agricul- 
turist has ceased to be an economic factor of importance, 
except in Costa Rica and in some parts of Salvador; 
and today there are few places more lifeless and more 
depressing than the once prosperous settlements in the 
more remote country districts. 

The household servants and the common laborers, 
who form the poorest classes, are descendants of the 
native tribes whom the conquistadores overcame and 
enslaved early in the sixteenth century. The first 
settlers everywhere forced the Indians to work for them, 
either by declaring them slaves, as a punishment for 
rebellion, or by establishing the encomienda system, 
under which influential Spaniards were intrusted with 
the religious instruction of the inhabitants of certain 
villages, and in return for the benefits thus conferred 
were allowed to demand a certain amount of labor from 
their spiritual charges. These encomiendas, or reparti- 
mientos, were the principal source of income among the 
early colonists. The unfortunate aborigines were com- 
pelled to work in mines or plantations or to bring in 



8 THE FIVE REPUBLICS 

tribute to their masters, and they were treated with the 
most revolting cruelty when they failed to do so. After 
the Spanish government became aware of the grave 
abuses which the system involved, it ordered its sup- 
pression, but the encomiendas were finally abolished only 
after a long struggle with the colonists, who were 
secretly aided by the royal governors in maintaining 
their privileges. The Indians never entirely regained 
their economic independence, for their descendants, with 
the exception of a few thousands who live an isolated, 
half-savage life in clearings in the forest, are to the 
present day dependent upon employment on the plan- 
tations of the white families. 

"" Whether in the cities or in the country, the laboring 
classes live in one or two room huts of adobe or wood, 
with dirt floors and thatched roofs. A crude table and 
two or three chairs, one or more beds of rawhide or 
wood, and often a shrine, with a small image of the 
Virgin or of some saint, comprise the entire furniture. 
The walls are decorated with colored prints and adver- 
tisements, which are much prized by those fortunate 
enough to secure them from some passing traveler or 
from friends in the city. There is usually a loft in one 
end of the hut, in which the stock of corn and beans, 
if there is any, and a few of the more bulky family 
possessions are kept, while the small tools and utensils 
and the contents of the larder are suspended from the 
walls. Water, which is often brought by the women on 
their heads from some little distance, is contained in 
large earthenware jars and dipped out in gourds, which 
serve not only as cups but as washbasins. Cooking is 
performed over an open fire on a brick platform, where 
there is sometimes a primitive oven. The family live- 
stock is represented by a few pigs and chickens, which 
associate on friendly terms, inside and outside of the 
house, with the lean dogs and naked children. 

Under such conditions, fhe Central American laborer 



OF CENTRAL AMERICA 9 

lives contentedly and without worry, for he requires few 
clothes and but a small amount of inexpensive food. 
Corn, prepared in the form of tortillas, beans and rice 
cooked with lard, and coffee form the diet of the average 
family day after day. Plantains are also eaten in great 
quantities in some parts of the Isthmus, and eggs can 
frequently be secured. Meat can be had only occasion- 
ally outside of the cities, and vegetables, although easily 
grown, are little cultivated. The same is true of the 
innumerable and delicious tropical fruits, which grow 
up where accident dictates, without care or protection. 
Because of the primitive living conditions, there is a 
considerable amount of disease and a high death rate, 
especially among the children. Malarial fever and 
typhoid are common, and intestinal parasites are omni- 
present. The hookworm, especially, has done incal- 
culable harm. The eradication of this disease has recently 
been undertaken by the governments of several of the 
five republics, with the aid of the International Health 
Commission of the Rockefeller Foundation, which has 
contributed large sums of money and lent trained men 
for the prosecution of the work. The prevalence of the 
hookworm, which perhaps contributes as much as any 
other factor to the poor physical condition of most 
tropical races, is indicated by the fact that of the persons 
examined by the representatives of the Commission in 
1915, 60.1 per cent were found to be infected in Costa 
Rica, 58.6 per cent in Guatemala, and 49.4 per cent in 
Nicaragua.^ Notable results have already been ob- 
tained, not only in curing sufferers, but in educating the 
people and their governments to appreciate the need for 
improvements in sanitation and the need for closer at- 
tention to the public health in general. When the prin- 
ciples of hygiene are better understood in the Isthmus, 
and when better systems of sewers and water supply are 

^ These figures are compiled from the Second Annual Report of the 
International Health Commission, 1915. 



10 THE FIVE REPUBLICS 

provided, the Central American cities should be as 
healthful as any in the temperate zones, for their mod- 
erate climate and the porousness of the volcanic soil 
upon which they are situated should do much to prevent 
the diseases common in other parts of the tropics. 

In the country villages, life is extremely imeventful 
and deadening. The women spend a large amount of 
time in visiting one another and in attending church 
services or prayer meetings. The men work, where there 
is work, on week days, and get drunk on aguardiente, or 
sugar-cane rum, on Sunday. The fiestas and fairs, which 
are held at least once a year in every village, are mainly 
an occasion for gambling and debauchery, so far as the 
common people are concerned. There are few other 
recreations. The monotony of such an existence, which 
leads the rural laborers to embark on any adventure 
offering promise of excitement and prospects for loot, 
is one of the factors which makes it easy to raise a 
revolutionary army in many of the Central American 
States. 

Except in Guatemala, where there exists a peonage 
system which will be described later, the wages of the 
working man are not very low, considering the fact that 
his services are of far less value to the employer than 
would be those of one who was more energetic and 
intelligent. They range in general from the equivalent 
of fifteen cents United States currency a day with food 
and lodging to thirty, forty, or even fifty cents a day 
without it, and in some places are still higher. The 
workmen are neither conscientious nor physically strong, 
and the amount which they accomplish in a day is small. 
On many plantations, payment is made by the task, and 
the employees work intermittently, frequently failing to 
appear for days at a time. This is in part due to the 
prevalence of drunkenness and disease, and in part 
simply to an indisposition to work more than is neces- 
sary to provide a bare subsistence. 



OF CENTRAL AMERICA 11 

There is little pretense of equality in the treatment 
by the government of the upper and lower classes. The 
laborers and country people are forced to bear the entire 
burden of the military service which is theoretically 
required of all, and to perform work on the roads and 
other public undertakings from which the wealthy 
families are practically exempt; and they are every- 
where taxed heavily, although by indirect means, for 
the benefit of the professional politicians who occupy 
posts in the government. The petty local officials 
exercise an almost irresponsible authority over them, 
and frequently use their power for their own personal 
advantage or for that of their friends. The poor man 
enjoys little security in his personal or property rights, 
and thus has little incentive to better his position. 

Education, however, has done much in the last twenty- 
five years to improve the situation of the masses in the 
more advanced republics, for the laboring man who 
learns to read and write has in his hands a powerful 
weapon both for his own protection and for the ad- 
vancement of his political and economic interests. In 
Costa Rica, where public schools have been established 
everywhere and the percentage of illiteracy is com- 
paratively insignificant, the peasants are assuming a 
more influential place in the community. Salvador, 
Nicaragua, and Honduras have been prevented by in- 
ternal disorder and lack of resources from raising their 
educational systems to the level of that of their more 
tranquil neighbor, but their rulers have taken a very 
real interest in popular instruction, and have made it 
possible for a very large part of the people to acquire 
a knowledge of reading and writing. In Guatemala 
alone the great majority of the inhabitants are at present 
illiterate. This is not entirely the fault of the govern- 
ment, which has instituted a large number of schools 
and has legislated for the establishment of others by 
the owners of plantations, but is due rather to the 



12 THE FIVE REPUBLICS 

indifference of the Indians themselves, who as a rule 
do not care even to learn to speak Spanish. 

Public and private morality have been rather dis- 
astrously affected by the social conditions arising from 
the conquest of a half -civilized race by adventurers who 
in too many cases belonged to the lowest and worst 
classes in Spain. The Indians who continued to form 
the bulk of the population were deprived of their own 
religious and moral customs, and were given in their 
place a Christianity which was imposed upon them by 
force, and of which, because of the cruelty and licen- 
tiousness of their conquerors, they saw only the worst 
side. The oppression and violence which characterized 
the communities of the Isthmus during their early 
history long prevented their social life from acquiring 
stability, and made brute force, rather than conscience 
or public opinion, the ruling principle in private as well 
as in public affairs. Even at present, in some of the 
five countries, political and social conditions tend to 
militate against public spirit and altruism in pubHc life 
and personal honesty in private life. Social conditions 
also leave much to be desired. With the men of the 
upper classes, ideas of morality are generally rather 
loose, and it is not unusual to see a respected citizen 
bringing up a number of children by other women side 
by side with those of his lawful wife. The community 
not only does not censure his careless observance of the 
marital tie, but even receives the illegitimate offspring 
on practically the same footing as the legitimate. With 
the half-breed laborers, marriage is an institution which 
finds little favor, not, as is sometimes said, because of 
the expense which the ceremony involves, but because 
both the men and the women disHke the obligations and 
ties which a formal union creates, and prefer a relation 
which, although generally fairly permanent, can be 
broken off by either party at will. 

This low morality is to a very great extent due to 



OF CENTRAL AMERICA 13 

the lack of religious restraints. At one time, the 
Catholic Church, to which all of the people nominally 
belong, was very powerful throughout the Isthmus, 
and the clergy and the numerous monasteries exercised 
a strong social and political influence. A few years 
after the declaration of independence, however, the 
Liberal leaders, who had been opposed by the clerical 
party in their struggle to regain power during the 
years 1826-29, expelled the archbishop and many of 
the other priests, and suppressed all of the convents. 
The religious orders were never revived, except in 
Guatemala after the Conservative victory of 1839. 
There they continued to exercise a dominant influence 
until the revolution of 1871, after which the govern- 
ment again suppressed them and took radical measures 
to destroy the influence of the secular clergy. In the 
other countries, the priests continued to play a small 
part in politics, usually as the allies of the Conservative 
party, but at present their influence can hardly be said 
to be important. In spiritual as well as in temporal 
affairs the Church has now almost entirely lost its hold 
on the people. Many of the women are still very 
devout, but the men, especially among the upper classes, 
are for the most part frankly irreligious. In the country 
districts, few of the churches can support a priest, and 
religious observances are confined to prayer meetings, 
led and participated in by the women, and to tlie rather 
licentious celebration of holy days. Among the priests, 
many of whom are foreigners, there are some who lead 
an irreproachable life, but many others, especially in the 
poorer countries, do much to harm the Church by their 
scandalous conduct. There are a few missionaries from 
England and the United States, but Protestantism is so 
utterly unsuited to the temperament of the people that 
they have made few converts. 

The Central American has, nevertheless, many good 
quahties. He is good-natured, affable, profoundly at- 



14 THE FIVE REPUBLICS 

tached to his friends and the members of his family, and 
deeply susceptible to lofty ideals and patriotic impulses. 
In every city there are a number of men who are dis- 
tinguished for their personal integrity and their scrupu- 
lous honesty, whose influence and example do much to 
offset the demoralizing effects of conspicuous political 
corruption and commercial dishonesty. Even among 
the most brutal and the most ignorant of the men who 
have been in power in the various republics, there have 
been few who have not done what they could, in spite 
of the difficulties presented by armed opposition and 
administrative disorganization, to promote the social and 
economic progress of their countries. 

The backwardness of the five republics is in large 
part due to the isolation in which they were kept by 
Spain during the three centuries of their existence as 
colonies. Their development was restricted until the 
beginning of the nineteenth century by a misguided 
policy which made progress almost impossible. Agri- 
culture and industry were hampered by burdensome 
regulations and taxes which not only prevented the 
cultivation of many products for which the country was 
admirably suited, but also made difficult, if not im- 
possible, the exportation of those which could be grown. 
The prohibition of commercial intercourse with foreign 
countries and the restriction of that with Spain, com- 
bined with other obstacles to transportation to and from 
Europe, practically shut off Central America from the 
rest of the world during the entire colonial period. 
Even the declaration of independence in 1821 made 
little immediate change in this respect, for the new 
repubhcs had still no direct means of communication 
with Europe and North America. They all faced the 
Pacific rather than the Atlantic Ocean. Guatemala 
City, San Salvador, and the other capitals were not only 
nearer to the West than to the East Coast, but they 
were separated from the latter by mountainous country 



OF CENTRAL AMERICA 15 

and pestiferous jungles through which travehng was 
difficult and dangerous. It was not until the construc- 
tion of the Panama and Tehuantepec Railways brought 
the West Coast ports within comparatively easy reach 
of the centers of the world's trade that they could export 
their products profitably. More recently the construc- 
tion of railways across Guatemala and Costa Rica has 
given those countries an outlet upon the Atlantic. 

Even after the main obstacles to conmaunication with 
the outside world had been removed, the economic de- 
velopment of the five republics was held back by in- 
ternal conditions, for the political disturbances which 
characterized their first half century under republican 
institutions, and which are still prevalent in some of 
them, made large scale agriculture difficult and unprofit- 
able, and discouraged commerce. The civil wars often 
drew the laborers away from the plantations at the time 
when their services were most needed, and caused a 
periodic destruction of property and a laying waste of 
planted fields. In Guatemala, Costa Rica, and Sal- 
vador, where revolutions have been less common during 
the last generation, the wealthier classes have become 
very prosperous through the production and exportation 
of coffee, but Honduras and Nicaragua, because of the 
almost continuous fighting between rival factions, are 
today but little better off than in 1821. 

All of the five Central American countries are still 
purely agricultural communities. Manufacturing has 
never advanced beyond the point of providing a few 
primitive articles for home consumption, and the native 
industries have declined since the increase of commercial 
relations with the outside world has made it more profit- 
able to import many things, such as textiles, furniture, 
and leather goods, than to make them with the crude 
tools of the local craftsman. There are a few small 
factories in each city which produce aguardiente, cigars 
and cigarettes, cloth, candles, and other articles, but in 



16 THE FIVE REPUBLICS 

none of them is there employed a great amount of 
capital or a great number of laborers. The most im- 
portant agricultural products, from the native point of 
view, are the staple food crops, among which corn, which 
is cultivated by every farmer in every part of the 
Isthmus, holds first place. Beans, rice, sugar cane, and 
plantains are also found everywhere where they will 
grow. Potatoes, cacao, and countless varieties of fruits 
and vegetables from the temperate zone as well as from 
the tropics are raised here and there in the chmates 
suited to them, but comparatively little interest is shown 
in their cultivation, and they are surprisingly hard to 
obtain except in the markets of the larger towns. Agri- 
cultural methods have changed Httle since the Spanish 
conquest. Except in the most thickly settled regions, 
the old Indian system of planting is still employed. A 
patch of forest is cleared by cutting down the larger 
trees and burning off the undergrowth and branches, 
and the seed is sown among the charred trunks in holes 
made with a pointed stick. After being used for one 
year, the land is planted with grass for pasture or 
allowed to return to its original condition, and is not 
cultivated again for from three to five seasons. In the 
regions where the density of the population makes it 
necessary to plant the fields year after year, a crude 
form of wooden plow is used, but fertilizers and modern 
agricultural implements are little known. The machete, 
a long heavy knife which each laborer carries at his belt, 
serves as axe, hoe, and trowel. The soil is so rich, 
however, that it produces two and in some places even 
three crops each season without apparently becoming 
impoverished. 

In Nicaragua and Honduras, and in the low country 
along the Pacific Coast of the other republics, a large 
part of the land is devoted to cattle haciendas. The 
stock as a rule is not of a very fine type. Except on a 
few ranches no attempt has been made to improve the 



OF CENTRAL AMERICA 17 

race of the herds by the importation of animals from 
abroad, and the native stock seems to have degenerated 
somewhat as the result of centuries of life in a hot 
climate. The cattle receive little attention from their 
owners, and in some regions die by thousands in dry 
years for lack of food and water. Practically all of 
the meat is consumed in Central America, for the 
surplus product of Honduras and Nicaragua is bought 
by their more densely populated neighbors. The hides 
and horns are exported to the United States and 
Europe, but the occasional attempts which have been 
made in recent years to do the same with a few thou- 
sand head of live cattle have not been very successful. 
Dairy products play but a small part in Central 
American domestic economy. The native cows produce 
little milk, and the cheese which is made in large quan- 
tities is commonly of a very inferior quality. 

Until several years after the declaration of independ- 
ence practically the only exports of Central America 
were the forest products of the East Coast and small 
amounts of indigo, cochineal, and cacao from the com- 
munities on the Pacific side of the Isthmus. The five 
republics had very little commerce, and for this reason 
had little intercourse with the outside world. This state 
of affairs was completely changed when the coffee plant 
was introduced from the West Indies in the second 
quarter of the last century. As the soil and chmate on 
the slopes of the volcanoes along the western coast were 
found to be admirably suited to this valuable crop, and 
the product of Central America from the first com- 
manded a high price in the European markets, the 
number of plantations increased rapidly, and the new 
industry soon became the chief interest of the landed 
proprietors in Guatemala, Costa Rica, and Salvador, 
and to a less extent in Nicaragua. The cultivation of 
coffee was in fact carried to a point where it seriously 
affected the production of the staple food crops, for 



18 THE FIVE REPUBLICS 

land formerly planted with corn and beans was turned 
into cafetales, and the inhabitants of the rural districts, 
who formerly raised enough food to supply their own 
wants and to sell a small amount in the cities, were 
led by the greater earnings or were forced by official 
pressure to become laborers on the coffee plantations. 
Food prices have consequently risen, and it has become 
necessary to import flour, rice, and sometimes even beans 
and corn from other countries. When land has once 
been planted with coffee trees, which require from three 
to five years to come into bearing and thus represent a 
large amount of fixed capital, it is difficult to return it 
to its original uses, or to release the laborers from the 
plantation to engage in other occupations, even though 
in eras of low coffee prices the production of other crops 
might be more profitable. 

Coffee is most advantageously grown on a large scale, 
as its preparation for the market requires the removal 
of the pulp of the berry and of the two skins of the 
bean itself by rather expensive and complicated ma- 
chinery. The better plantations in Central America 
produce from 200,000 to 1,000,000 pounds of cleaned 
coffee each year,^ and have their own beneficios, or 
cleaning mills. The farmers who operate on a smaller 
scale, or who for some reason have not found it profit- 
able to install a cleaning mill, send their coffee to 
heneficios in important shipping centers, where the work 
is performed at so much per bag. Before the war the 
greater part of the product was exported to Germany, 
England, or France, but the partial closing of the 
market in Europe has caused increasing amounts to be 
sent to the United States since 1914.^ 

The rapid development of the export trade and the 
corresponding increase in the imports of the five re- 

' In Guatemala there are three or four plantations which produce much 
more than this. 

2 For a more complete account of the coffee trade, see Chapter XII. 



OF CENTRAL AMERICA 19 

publics would not have been possible without the im- 
provement in means of transportation which has taken 
place during the last half century. There has been a 
remarkable betterment, especially in the facilities for 
travel between Central America and the United States. 
On the Atlantic side, the United Fruit Company, and, 
in times of peace, the Hamburg- American line, as well 
as a number of smaller companies, provide an ample 
freight and passenger service between all of the im- 
portant ports and New Orleans and New York. From 
Puerto Barrios and Puerto Limon, the termini of the 
transisthmian railroads, there are several boats each week. 
The conditions on the West Coast are much less satis- 
factory, for the Pacific Mail Steamship Company, 
which has almost a monopoly since the German Cosmos 
Line was forced to withdraw by the war, provides a 
very irregular and rather expensive service. Even 
there, however, conditions are immeasurably better than 
at the time of the opening of the Panama Railway 
in 1855. 

Internal commimications have also been improved. 
Fifty years ago, there were practically no railways in 
the entire Isthmus, but at the present time each of the 
national capitals, except Tegucigalpa, is connected with 
one or more seaports by daily train service. Other 
forms of transportation and travel, however, are still in 
a rather primitive state. Some of the repubUcs have 
spent large amounts of money in constructing roads for 
bringing the products of the country to the cities or to 
the railway stations, but as a rule the impecunious 
governments have not been able to make much headway 
against the difficulties presented by the mountainous 
character of the country and the torrential rains of the 
wet season. There are few highways which are suitable 
for any vehicle more elaborate than the slow-going 
oxcart, and in many places even these have to give way 
to the pack mule. 



20 THE FIVE REPUBLICS 

One of the forces which has been most potent in 
bringing Central America into closer contact with t'ne 
outside world has been the cultivation of bananas by 
^orth American enterprise along the low, densely- 
wooded Atlantic Coast. Until recently almost the only 
inhabitants of this region were scattered, uncivilized 
tribes descended from Indians and runaway West 
Indian negroes, who lived in an extremely primitive 
way in clearings along the shore or on the banks of the 
rivers. There were one or two struggling ports and a 
few settlements of woodcutters who traded in mahogany, 
logwood, and Spanish cedar, but these had little inter- 
course with the civiHzed communities of the interior. 
Within little more than a quarter century, this un- 
pleasant and unhealthful but marvelously fertile region 
has been transformed. Great banana farms have been 
created in the formerly impassable jungle, and a net of 
railways has been built to carry the perishable fruit to 
the ports, from which it is shipped in fast steamers to 
the United States and Europe. This is the work of 
one American corporation, the United Fruit Company, 
which controls the banana trade not only of Central 
America, but of the West Indies as well. As the plan- 
tations and the transportation lines are managed prin- 
cipally by North Americans and the manual labor is 
performed by negroes from the British West Indies, 
Enghsh is the predominant language of the new towns 
which have sprung up. To the native Central American, 
the Coast is almost a foreign country. The Caribbean 
ports of Honduras and Nicaragua are in fact for all 
practical purposes farther from Tegucigalpa and 
Managua than from New Orleans, and even in those 
countries where there are better means of transportation 
from the interior to the fruit ports the banana country 
has developed in its own way, influenced little, econom- 
ically or politically, by the communities of the interior, 
^he interior towns, however, have been profoundly 



OF CENTRAL AMERICA 21 

affected by the changes on the East Coast. The fruit 
trade is mainly responsible for the improvement of the 
steamship service; and in Guatemala and Costa Rica 
the railways built originally for the transportation of 
bananas have been extended to the capitals of the two 
republics, so that the journey from Europe and North 
Anierica to those cities, and through them to other parts 
of the Isthmus, has been shortened by several days. 

In the interior of several of the repubhcs, the last 
fifty years have seen a considerable immigration of 
foreign business men and planters, among whom 
Germans and North Americans have been the most 
numerous, although there have also been many French- 
men, Englishmen, and Itahans. The newcomers have 
obtained almost complete control over the foreign trade 
of the Isthmus, and even the retail trade at the present 
time is largely in the hands of Spanish, Chinese, and 
Armenian shopkeepers. Mercantile pursuits were at 
one time one of the chief occupations of the Creole 
famihes, but most of the easy-going Central American 
merchants, accustomed to the routine created by three 
centuries of isolation, have been imable to hold their 
own under changed conditions. The same is true, 
though to a less extent, in agriculture. Many of the 
finest plantations were developed in the first place by 
foreigners, and others are constantly passing into their 
hands. The majority of those still belonging to natives 
are heavily mortgaged, for the Central American planter 
apparently cannot resist the temptation to borrow money, 
notwithstanding the high rates of interest and the ruin- 
ous conditions on which he secures it. There are several 
European firms whose business it is to make loans 
secured by plantations and crops. These eventually 
take over the properties which fall under their control, 
either reselling them or operating them on their own 
account. 

There are also several small and not very scrupulous 



22 THE FIVE REPUBLICS 

banks, of which the majority have been estabhshed, in 
part at least, with foreign capital. In some of the 
republics these have co-operated effectively with the 
officials in the disorganization of the currency and of 
the government finances. Large investments have been 
made by North American interests in railways and 
mines. The total amount of foreign capital in the 
country is, however, comparatively small, because 
internal disorders and the slowness with which the 
country has been opened up have until lately discour- 
aged investments. There is still an immense field 
for foreign enterprise in the exploitation of Central 
America's natural resources, which include not only 
land suitable for the production of almost every kind 
of agricultural product, but also great forests of val- 
uable woods and as yet untouched mineral deposits. 

In some respects, the relations between Central 
America and the outside world have not been entirely 
beneficial to the communities of the Isthmus. Many of 
the foreigners, especially among the Americans, have 
been fugitives from justice in their own countries who 
have used their talents to the disadvantage of the 
natives, or adventurers who have mixed in the politics 
of the country for their own profit. Unscrupulous 
corporations or individuals have exploited the inex- 
perience or cupidity of the local governments to obtain 
valuable concessions without making any adequate re- 
turn for the favors received, and have not even hesitated 
to incite or to assist revolutions when they thought that 
their interests would be furthered by doing so. Too 
many of the foreign business men have done what they 
could to make worse the already low standards of 
commercial morality and have shown themselves more 
unprincipled than their native competitors. In spite of 
the distrust generated by hard experiences, however, 
the Central Americans do not seem to dislike the new- 
comers or greatly to resent their intrusion. Many 



OF CENTRAL AMERICA 23 

North Americans and Europeans have become respected 
and influential residents of the communities in which 
they have settled, and marriages between foreigners and 
natives of the better class, which have been generally- 
welcomed by the Creole families, are gradually giving 
rise to a half -foreign element which is becoming more 
and more prominent in each of the five republics. 

Closer contact with the outside world has thus brought 
about entirely new conditions throughout the Isthmus. 
What the final result of the present changes will be, it 
is difficult to say. The native families are now more 
and more losing their hold on the economic life of the 
country, for commerce, banking, mining, and to an 
increasingly greater extent agriculture, are controlled by 
foreigners. They are therefore being forced into the 
learned professions, which afford a very poor livehhood 
for any but the most able, and into politics. Their 
influence is becoming less and less, and the time seems 
not far distant when the dominant place in the com- 
munity will be assumed by the foreigners and their 
descendants, who will probably be assimilated to a great 
extent into the native population. Some of the more 
energetic and intelligent native families will doubtless 
be able to maintain their present wealth and influence, 
although they will be forced to change their customs and 
habits completely, as many of them are already doing in 
the more advanced countries. Whether political and 
social conditions will be improved or made worse by 
these developments it is still too early to say, but it is 
inevitable that both the character of the governments 
and the conditions of the people as a whole should be 
profoundly affected. 



CHAPTER II 

CENTRAL AMERICAN POLITICAL 
INSTITUTIONS 

Early Political History of the Isthmus — Difficulty of Establishing a Stable 
Government — Annexation to Mexico — Establishment and Dissolution of the 
Central American Federal Republic — Strife Between Liberals and Conserva- 
tives — Description of Central American Governments at Present — Importance 
of the President — Political Parties, Patronage, and Graft — Revolutions. 

On September 15, 1821, the principal civil and ec- 
clesiastical personages of Guatemala City, with many 
of the royal authorities and the more prominent Creoles, 
met in convention to proclaim the independence of the 
five provinces of the Viceroyalty of Guatemala, which 
had until that time been a dependency of the Spanish 
crown. The existing administrative machinery was not 
for the moment abohshed, for many of the officials had 
approved of and had taken a prominent part in the 
action of the separatist party. The Governor General, 
Brigadier Gainza, continued to exercise the executive 
power, and the local governors in Salvador, Honduras, 
Nicaragua, and Costa Rica were instructed to do the 
same. In the capital, a committee of influential natives, 
called the Junta Consultiva, was appointed to assist 
the former royal authorities until a new form of govern- 
ment should be decided upon. There was no armed 
resistance to this action on the part of the mother 
country, for the latter, engaged in a prolonged struggle 
with her more important colonies in the South, was in 
no position to send troops to subjugate the inaccessible 
and relatively insignificant communities of Central 
America. 

The prospect which confronted the provinces thus 

24 



REPUBLICS OF CENTRAL AMERICA 25 

thrown upon their own resources was far from bright. 
They were ill equipped for existence as an independent 
nation. The Creole aristocrats, who had led the move- 
ment for separation from Spain, and who now assumed 
control of the government, had had little training to 
fit them for the exercise of their new responsibilities, 
for few had received more than the most rudimentary 
education at home, and fewer still had traveled in 
foreign countries. None had had any practical ex- 
perience in poHtical affairs, for it had always been the 
policy of the royal authorities to fill official positions 
exclusively with Peninsular Spaniards,^ thus excluding 
the natives of the colonies from all share in the 
administration. There were a half-score of brilliant 
leaders in the councils of the new nation, but they were 
notable rather for their exalted but impractical ideals than 
for any grasp of the concrete situation with which they 
had to deal at home. Their patriotism was of a high 
order, but their statesmanship left much to be desired. 
Among the common people, the great majority were 
ignorant and superstitious Indians, with a small admix- 
ture of Spanish blood and a thin veneer of Spanish 
civilization. They were scattered through a strip of 
land eight hundred miles in length, in isolated valleys, 
separated from one another by mountain ranges and 
pestilential jungles, where rough mule trails afforded 
the only means of cormnunication. Throughout the 
greater part of the Isthmus, the people of each village, 
having little commerce with their neighbors or with the 
outside world, depended for subsistence almost entirely 
upon their own products. A few favored sections pro- 
duced indigo, cochineal, or precious metals for export, 
but the expense of shipping these articles from the 
Pacific Coast to Spain, the only country with which the 
colonists were allowed to trade, was so great that the 
planters derived little profit from them. Standards of 

* By Peninsular Spaniard is meant a native of European Spain. 



26 THE FIVE REPUBLICS 

living were therefore little higher, even in the cities, than 
they had been three hundred years before. 

The Central American nation was divided within itself 
from the very first. In Guatemala there was a bitter 
jealousy, created by the special privileges and the 
pretensions of the more favored classes, between the 
Peninsular officials and the Creole great families on the 
one hand and between the latter and the merchants and 
professional men of less aristocratic origin on the other; 
and this feeling was intensified by radical differences of 
opinion about religious and economic questions. Besides 
the dissensions within the group which assumed the 
control of political affairs in the capital, there were 
factional conflicts and local civil wars in almost every 
part of the Isthmus. The provinces, which had long 
felt that their interests were sacrificed by the royal 
authorities to those of Guatemala, showed an inclination 
to dispute the authority of the new central government, 
and their insubordination was encouraged by the ambi- 
tious local governors, who desired to enjoy independent 
authority, and by the not inconsiderable party which 
still remained loyal to Spain. San Salvador, Comayagua, 
Leon, and Cartago, the seats of the provincial govern- 
ments, were soon the centers of more or less open revolts 
against Gainza and the Junta Consultiva^ while other 
towns, actuated on their side by jealousy of the local 
capitals, allied themselves to the party in control in 
Guatemala. The result was a condition of anarchy 
which throttled agriculture and commerce, and almost 
put an end to all semblance of organized government. 

The inexperience of the Creole leaders, and the con- 
flicts between jealous social classes and rival towns, were 
the more disastrous because the Central American com- 
munities possessed no poHtical institutions which could 
be used as the basis for the establishment of an inde- 
pendent government. In this respect they were in a 
situation very different from that of the United States 



OF CENTRAL AMERICA 27 

in 1783, for in that country the state and local organi- 
zations had remained almost unchanged despite the 
revolution, and the creation of a new central authority- 
had been made comparatively easy by the inherent 
political capacity derived from centuries of racial ex- 
perience in self-government. In Central America, the 
country had been ruled for three hundred years by 
officials and laws imposed by an outside force, and when 
this force was withdrawn the old order fell to pieces, 
leaving nothing to take its place. The self-appointed 
revolutionary committees had little hold on the loyalty 
of the people, and little power to make their commands 
respected. The only pohtical institution which may be 
said to have survived the change was the municipality. 
Even in colonial times, the wealthier Creoles had been 
able to purchase positions in the ayuntamientos, or gov- 
erning boards of the cities, and had thus had a voice 
in the management of certain purely local affairs. After 
the declaration of independence, the ayuntamientos were 
in many places almost the only respected authority, and 
they played a large part both in maintaining order and 
in organizing the juntas which took charge of provincial 
affairs. But they never formed a real basis for the 
formation of state and national governments, because 
their independence and authority, which had been small 
under Spanish rule, was taken from them early in the 
revolutionary era by the military despots who obtained 
control of affairs. Their prominence during the transi- 
tional period after 1821 contributed little to the estab- 
lishment of orderly government, for they were the foci 
of the local jealousies which did more than anything else 
to keep the country in a state of anarchy. 

The organization of a permanent government, to take 
the place of the provisional revolutionary committees, 
consequently presented a difficult problem. There was 
from the first a strong party which favored the establish- 
ment of a federal republic, but the majority of the 



28 THE FIVE REPUBLICS 

wealthy classes, who had supported the declaration of 
independence only because of their jealousy of the Pen- 
insular Spaniards who monopolized the official positions 
and because they realized that the mother country was 
no longer in a position to protect her colonies from out- 
side aggression and internal disorder, doubted the ability 
of the people of the Isthmus to rule themselves under 
republican institutions, and advocated the union of the five 
provinces with Iturbide's Mexican empire. This party 
soon grew very strong as the result of disorders which 
broke out in Honduras and Nicaragua, and on January 
25, 1822, the Junta Consultiva voted in favor of the 
annexation. General Fihsola, the representative of the 
Emperor, reached the capital a few months later, and 
proceeded at once with an army against the people of 
San Salvador, who had refused to recognize his authority. 
He had barely overcome the resistance of the republicans 
there when news arrived that Iturbide had fallen. 

Filisola, returning to the capital, called together a 
congress of representatives from each of the five 
provinces, to which he turned over his power. This 
body, assuming the title of National Constituent As- 
sembly, declared the former Central American colonies 
a federal republic, and appointed a provisional executive 
committee of three men, who exercised a precarious 
authority, subject to constant interference by the As- 
sembly, for two years. During this time, the Assembly 
framed an elaborate constitution, modeled on that of 
the United States, establishing a federal government in 
Guatemala City, and state governments in each of the 
five provinces. A president and five Jefes de Est ado, 
chosen by the people through electoral colleges, took 
the place of the Captain General and the royal provincial 
governors, and the law-making power was placed in the 
hands of a Congress of one chamber. The system of 
checks and balances in the American constitution was 
taken over and made more intricate by elaborate pro- 



OF CENTRAL AMERICA 29 

visions for the maintenance of the independence of the 
legislative, executive, and judicial departments and for 
the prevention of abuses of power. 

The Assembty also adopted much progressive legisla- 
tion, which did away with many of the worst features 
of the Spanish regime. From the first, however, its 
sessions were disturbed by irreconcilable differences of 
opinion between the radical members, who were in the 
majority, and the clergy and many of the rich land- 
owners and merchants, who disapproved of the proposed 
reforms. As a result of this conflict, two parties were 
formed, which called themselves " Liberals " and " Con- 
servatives." The Liberals controlled the first consti- 
tutional congress, which met in 1825, and elected their 
candidate, Manuel Jose Arce, President of the Republic. 
The latter, however, soon quarreled with his own party, 
dissolved the congress, and even overthrew and re- 
organized the state government of Guatemala, with the 
aid of the Conservatives. These arbitrary acts caused 
revolts in many parts of the Isthmus, and especially in 
Salvador. The people of that state had always been 
peculiarly jealous of the control of their affairs from 
Guatemala, and their hostility towards the capital had 
been increased by the opposition of the federal authori- 
ties to the creation of a new diocese in their territory. 
LTnder the leadership of Father Delgado, who aspired 
to the bishopric, they united with the disaffected party 
in Honduras and Guatemala in a two years' war against 
Arce, and finally succeeded in overthrowing him (1829). 

Francisco Morazan of Honduras, the leader of the 
victorious army, was proclaimed President of the Federa- 
tion in 1830. The Guatemala state authorities who had 
been expelled by Arce were reinstated, and Liberal 
supremacy was established by force of arms throughout 
the Isthmus. There were frequent Conservative revolts, 
however, and even the people of Salvador, who had 
played the principal part in Morazan's triumph, showed 



30 THE FIVE REPUBLICS 

their former jealousy of domination from Guatemala by 
turning against him. Their resistance was overcome by 
force in 1831, but it was thought politic to transfer the 
seat of the federal government to San Salvador. After 
this, Morazan's prestige waned rapidly. His efforts to 
repress disorder were unavailing, and the Conservatives 
gradually regained control of many of the state govern- 
ments. The last federal congress, which adjourned in 
1838, declared the states free to govern themselves inde- 
pendently; and in 1839, when Morazan's second term 
came to an end, his authority was recognized nowhere 
outside of Salvador. He was expelled from Central 
America in the following year by an army from Hon- 
duras, Nicaragua, and Guatemala. 

The breakdown of the federal system was inevitable. 
Even those responsible for the adoption of the consti- 
tution of the United States as a model had Httle idea 
how that constitution really worked, and had no con- 
ception of the spirit of compromise and of mutual respect 
for legal rights which alone made the existence of a 
government such as they wished to establish possible. 
Many of the state governors refused to obey the federal 
officials, and were overthrown by the latter and replaced 
by adherents of the faction in power in the capital. The 
Congress, attempting to tie the hands of the executive, 
was reduced to impotence by the use of the army. The 
President himself succumbed before the end of his term 
to a revolution in which all of the disaffected elements 
took part. Even a better organized government would 
probably have been unable long to maintain order in a 
country where di^Rmces were so great, means of com- 
munication so inadequate, and sectional jealousies so 
intense as in Central America. 

Eqi;d;lly inevitable was the breakdown of the demo- 
cratic institutions which the leaders of the constituent 
assembly had sought to create. The elections soon 
became a farce because of the ignorance and indifference 



OF CENTRAL AMERICA 31 

of the great mass of the people. The history of the 
Central Americans had never taught them respect for 
the will of the majority, and there was consequently 
little inclination from the first to accept an unsatisfactory 
verdict at the polls in good faith. The authorities 
gradually learned to bring pressure to bear upon the 
voters in the interests of the party in power, and as time 
went on assumed a more and more complete control of 
the balloting, until candidates opposed by the govern- 
ment ceased to have any chance of success. At the same 
time the members of the opposition party were restrained 
or expelled from the country, to prevent their intriguing 
or revolting against the government. Within a few years 
authority established and upheld by force was the only 
authority which was recognized or respected, and there 
was no means of changing the officials in power, and 
consequently no recourse against bad government, except 
revolution. Civil war had thus become an indispensable 
part of the political system. 

For some years after 1839, there was intermittent 
internal and international strife, with hardly an interval 
of real peace, in nearly every state of the Isthmus. 
Costa Rica alone, because of her peculiar social condi- 
tions, which will be described in a subsequent chapter, 
led a comparatively tranquil existence in her isolated 
valley. Elsewhere the establishment of stable govern- 
ments seemed impossible. Conflicting ambitions, mutual 
persecutions, and sectional jealousy, as well as differences 
over religious and economic questions, divided the politi- 
cal leaders of the community into vindictively hostile 
factions, which had no means of settling their disputes 
except by an appeal to arms. The state governments, 
resting upon the outcome of revolutions, had little claim 
to legaHty or to the respect of the community, and they 
were compelled to maintain their position, where they 
maintained it at all, by force and by tyrannical repression 
of attempts to overthrow them. Besides the opposition 



32 THE FIVE REPUBLICS 

of disaffected classes at home, they faced also the con- 
stant danger of intervention by neighboring state gov- 
ernments which were in the hands of the opposite party, 
for the solidarity created by mutual action in federal 
affairs led the Conservatives and Liberals in each state 
to assist their former brothers in arms in other states 
even after all formal political connection had been 
broken. This solidarity was strengthened by the ambi- 
tion of a large section of the Liberal party to re-establish 
the old federal union by force, under the leadership of 
the followers of Morazan, and by the opposition to this 
plan on the part of the Conservatives. 

During the greater part of the perici! from 1839 to 
1871, the Conservatives, under the leadership of the 
aristocratic-clerical party in Guatemala, were dominant 
throughout the Isthmus. The Liberals secured control 
for short terms at different times in Salvador, Honduras, 
and Nicaragua, but in almost every case they were 
overthrown by the intervention of Rafael Carrera, the 
President of Guatemala. These Conservative govern- 
ments, although usually controlled by the wealthiest and 
most respectable classes in the community, did little to 
improve the desperate political and economic situation 
into which the continual civil war had plunged the new 
repubhcs, partly because of frequent changes in the 
personnel of the governments and frequent dissensions 
within the ruling class, and partly because of the inherent 
weakness of administrations established and upheld by 
the force of a foreign government. 

In 1871-72 the Liberals returned to power as the 
result of a concerted movement in Guatemala, Hon- 
duras, and Salvador. This revolution effected far more 
than a mere change of presidents; it marked the de- 
struction of the old aristocratic-clerical party as the 
dominant force in politics. In Guatemala, where the 
Conservative leaders were exiled or imprisoned, and 
both the great families and the Church were deprived of 



OF CENTRAL AMERICA 33 

a great part of their property and influence, the old 
regime has never been restored. Its disappearance 
greatly weakened the position of its allies in Honduras 
and Salvador. A very similar though almost bloodless 
revolution occurred in Costa Rica in 1870, when General 
Tomas Guardia overthrew the " principal families " 
which had hitherto controlled the government. In 
Nicaragua, where party divisions were based rather on 
local rivalries than on class distinctions, the change from 
the old order to the new was neither so sudden nor so 
complete, and the Granada aristocracy was able to 
maintain itself in power until 1893. 

The Conservative party continued, indeed, to exist as 
a political force, but it was no longer a social group 
which stood for definite principles and points of view so 
much as mere organization of professional politicians. 
The influence of the great families became less and less, 
and the leadership in the party was assumed by military 
chiefs whose objects and ambitions were little different 
from those of their opponents. Since 1871, party lines 
have tended to disappear, and it has made little dif- 
ference in political conditions whether an administration 
was controlled by one faction or the other. In Honduras 
and Salvador, in fact, even the party names have almost 
ceased to be used, and in Nicaragua they denote merely 
the adherents of rival cities. It is difficult to say how 
strong the old aristocracy still is in Guatemala because 
of the ruthless suppression of all manifestations of 
political opinion by the government. 

Since 1871, the repubhcs of the Isthmus have been 
governed for the most part by strong, absolute rulers, 
who have concentrated all power in their own hands and 
who have on the whole been more successful in main- 
taining order than the frequently changing and less 
centralized administrations controlled by the Conserva- 
tive oligarchy. Revolutions and revolts still occur, but 
they are less often victorious than formerly, for the 



34 THE FIVE REPUBLICS 

relative power of the government has greatly increased. 
The agricultural development of recent years has made 
the wealthy classes, who have capital invested in coffee 
and sugar plantations, inclined to frown on attempts to 
plunge the country into civil war; and the improvement 
and the increased cost of artillery and other military 
material have made it more difficult to equip a revolution 
strong enough to overcome the regular army. Individual 
presidents, supported by strong military forces, have thus 
been able to hold the supreme authority for long terms 
of years, and to establish highly centralized, compara- 
tively efficient administrations, which have done much 
to encourage the development of the country. Whatever 
may be the disadvantages of the exercise of irresponsible 
power by one man, there can be no doubt that the 
Central American countries have made more progress 
under governments of this kind than they did under the 
constantly changing administrations of their early 
history, which had neither the prestige nor the military 
power necessary to maintain order. Until the other 
departments, and especially the legislatures, had been 
reduced to subjection by the executive, the action of the 
latter was often almost completely paralyzed, and more 
than one president was forced to resign by petty disputes 
arising purely from personal jealousy. Under such 
conditions it was of course impossible to pursue any 
definite and coherent policy. 

The majority of the Central American governments 
at the present time are republican only on paper, although 
the forms of the various constitutions are still observed. 
Elections are held regularly in all of the five republics, 
but they are controlled by the administration, which 
almost invariably secures the triumph of the official 
ticket. The extent to which this control is exercised 
varies with the character and the strength of the Presi- 
dent. In most cases, opposition candidacies are simply 
not permitted, and anyone engaging in propaganda un- 



OF CENTRAL AMERICA 35 

favorable to the government's party is severely dealt 
with. At other times, only known adherents of the 
President are allowed to cast their votes, and the ballots, 
if necessary, are fraudulently counted. Even in Costa 
Rica, where comparative freedom prevails, the citizens 
are sometimes intimidated or coerced, and the authorities 
are able to bring pressure to bear in many ways, by 
promises of favors or by petty persecutions. Such prac- 
tices are made easier by the fact that the voting is open 
and public, as the Australian ballot is unknown. One 
or two real elections, in which the government has not 
desired or has not dared to impose its will on the country, 
have been held in each of the five republics, but they 
have usually not been participated in by a large part of 
the people outside of the cities, and they are looked back 
upon for generations as events far out of the ordinary. 
As a rule changes in the presidency come about only 
when the chief magistrate voluntarily relinquishes his 
office to a member of his own party, or when the 
opposition is victorious in a civil war. 

So long as he can maintain himself in office and sup- 
press revolts against his authority, a Central American 
president is an absolute ruler, who dominates all other 
departments of the government. He appoints and re- 
moves every administrative official, and through his 
ministers directly supervises every branch of the public 
service. The revenues are collected and expended under 
his orders with a more or less perfunctory regard for the 
budget voted by the legislature, and with little pretense 
of making an accounting for them. He not only 
executes, but also makes and unmakes the laws, either 
through his control of the Congress, or simply by 
executive decree. The army and the police are under 
his absolute command. Even the courts usually decide 
the more important cases which come before them in 
accordance with his wishes. His power is curbed only 
by the fear of losing the support of his followers or of 



36 THE FIVE REPUBLICS 

being overthrown by a popular revolt, and neither of 
these dangers is ordinarily very great so long as he 
retains the loyalty of his friends by gifts of offices and 
money, and prevents political agitation by an effective 
use of the army and pohce. 

The national legislatures, in spite of the constitutional 
provisions aiming to make them independent and co- 
ordinate departments of the government, have in practice 
little authority of their own. Except in Nicaragua, 
where the bi-cameral system now prevails, each of the 
repubhcs has a Congress of one chamber. The members 
of these are theoretically elected by the people for a 
term of two or four years, but they are in reality chosen 
by the administration like other officials, and are there- 
fore little more than a mouthpiece of the president. 
Any attempt on the part of the Congress to oppose the 
wishes of the executive, in fact, is discouraged by the 
use of force or by minor persecutions, such as the 
withholding of salaries or the molestation of the dele- 
gates by the police. Not infrequently differences of 
opinion arise in regard to matters of little significance, 
but in matters of serious importance the Congress rarely 
attempts to assert its own will. 

With the judicial department, the case is much the 
same. The Supreme Court, elected for a fixed term 
either by the Congress or by the people, usually 
appoints and removes all minor judges and judicial 
employees. This system has worked well in Costa Rica, 
where the tribunals are generally independent and 
honest, but in the other republics pohtical considera- 
tions are apt to play a large part not only in the 
selection of judges but in the decision of cases. The 
courts are subjected to much the same kind of pressure 
as the legislature, and there are few of them which 
would dare to oppose themselves to the expressed 
wishes of the president. They therefore do little or 
nothing to protect private citizens against abuses of 



OF CENTRAL AMERICA 37 

power by the executive authorities or by the minor 
officials. 

The president is assisted by ministers whom he ap- 
points and who are responsible to him alone. The most 
important portfolios are those for War, Public Works, 
Finance and Public Credit, and Government. The minor 
departments — Justice, Public Instruction, Charities, etc. 
— are generally placed in charge of subsecretaries. The 
heads of the departments are rarely more than advisors 
and aids to the president, who directs their policy and 
passes on practically all of their acts. They have no 
independent authority, and as a rule no real influence 
over the conduct of affairs when the chief executive is 
a man of strong character. 

The local administration is under the direction of the 
Department of Government, which has a representative 
subject to the orders of the minister, and through him 
responsible to the president, in every town and village 
throughout the country. Each republic is divided into 
from seven to twenty-three departments, under gover- 
nors who are at the same time military commanders, 
'' jefes politicos y comandantes de armas/'^ These 
officials, who are appointed by the president, enforce the 
laws, collect the taxes, and control the expenditure of 
government funds in their jurisdictions, and for these 
purposes have under their orders practically all of the 
subordinate national authorities. The departments are 
subdivided into " municipalities " — districts which in- 
clude a town or village with the surrounding country — 
where the central authority is represented by a minor 
official commonly called comandante,^ who commands 
a few soldiers and is intrusted with the duty of 
maintaining order and enforcing the laws. These de- 

^ In Costa Rica, the departments are called provinces, and their admin- 
istrative heads, gobernadores. 

' This is not the official designation, which differs from country to country. 
In Guatemala, they are called comisionado politico y comandante militar, in 
Nicaragua, agente de policia, in Costa Rica, jefe politico, etc. 



38 THE FIVE REPUBLICS 

partmental and local authorities are too frequently petty- 
tyrants, who show little respect for the private rights 
or the property of the inhabitants of the districts under 
their jurisdiction. As they are subject to little real 
restraint in their own sphere of action, they are able to 
exploit the people of the lower classes practically as 
they please, and even persons of wealth and social 
position are not free from their persecutions unless they 
can protect themselves by the exercise of political in- 
fluence. Redress against abuses of power is difficult 
to secure, because the courts usually cannot or dare not 
interfere, and the higher authorities, more concerned 
with the loyalty than with the official virtue of their 
subordinates, take little interest in protecting the rights 
of common citizens. 

In each municipal district, there is a local govern- 
ment, or municipalidad, consisting of one or more 
alcaldes, or executive officers, and a board of regi- 
doreSy or aldermen. This body, which has wide juris- 
diction over matters of purely local interest, such as 
the repairing and lighting of streets, the building of 
roads and bridges, and the enforcement of sanitary 
regulations, is elected by popular vote and is theoretically 
independent of the local representatives of the depart- 
ment of government. In practice, however, the latter 
dominate its actions, and prevent the alcaldes from 
carrying out any action of which they do not approve. 
The members of the municipalidad themselves, more- 
over, are in most places nominated by the central govern- 
ment, which controls their election as it does that of 
other officials. In any event they are prevented from 
playing a very prominent part in the promotion of local 
interests by the lack of funds. Their revenues, which 
are derived mainly from taxes on business establish- 
ments and fees for water and other public services, 
rarely suffice to carry out any very important improve- 
ments, and their credit is very poor. As a result, the 



OF CENTRAL AMERICA 39 

central government is forced to construct and administer 
all of the more expensive public works, and to exercise 
many of the other functions which are assigned to the 
local boards by law. 

It can be readily seen that in a political organization 
such as has just been described the character of the 
administration will depend almost entirely upon the 
capacity and disposition of the man at its head. An 
able president, in a Caribbean Republic, exercises an 
absolute power for which it would be difficult to find a 
parallel anywhere in the civilized world.^ He is not 
restrained, like the absolute monarchs of Europe and 
Asia, by dynastic traditions or religious considerations, 
and he has little need to consider public opinion so long 
as he retains the good will of the army and of the office 
holders who owe their positions to him. He can often 
re-elect himself for term after term, and he is re- 
sponsible to no one for the exercise of his authority or 
for his management of the public revenues. The country 
is so small that he can, and does, extend his control to 
matters of minor and purely local importance, even 
interfering with his fellow-citizens' personal affairs and 
family relations, without regard for the most sacred 
rights of the individual. It is in his power to exile, 
imprison, or put to death his enemies, and to confiscate 
their property, while at the same time he can enrich and 
advance his friends. The ever-present possibility of 
revolution, it is true, prevents too great an abuse of 
power in some of the more enlightened republics, but 
in the others centuries of misgovernment and of the 

' It should be stated that the description of Central American govern- 
ments in this chapter does not apply in all its details to Costa Rica. In 
that country, although the written constitution and the framework of the 
government are the same as in the other countries, political conditions are, 
in fact, very different. The President comes into office, in most cases at 
least, by a free election rather than a revolution, and exercises a far less 
absolute power than elsewhere on the Isthmus. The peculiar conditions 
existing in Costa Rica will be described in a subsequent chapter. 



40 THE FIVE REPUBLICS 

oppression of one class by another have done away with 
respect for individual rights to such an extent that the 
crudest and most arbitrary rulers are tolerated because 
the people feel that they would only risk their lives and 
property, without improving their condition, by revolt. 
Only an exceptionally able man, however, can exer- 
cise such despotic power for a long period. A chief 
executive of less force of character will generally find it 
impossible to maintain his position or will be dominated 
by his political associates. Often a military leader or a 
powerful minister is the real ruler. It is frequently said 
that a strong, autocratic government is that which is best 
suited to the peculiar conditions of tropical America, 
because it affords the greatest security to agriculture 
and commerce and the best protection to foreign invest- 
ments. Many Central American presidents, however, 
inspired by patriotism and by republican ideals, have 
refused to exercise dictatorial powers, allowing the other 
departments of the government a measure of independ- 
ence, and relinquishing their offices to a more or less 
freely elected successor at the end of their legal term. 
These have not always been so successful in maintaining 
order and in carrying out public improvements as their 
less scrupulous contemporaries, because they have been 
unable to act with the same decisiveness and effective- 
ness which are possible where all authority is concentrated 
in the hands of one man; but such administrations at 
least provide an opportunity for the people to gain some 
experience in self-government, and make for a more 
healthy national political life than can be found where 
the expression of opinion in the press and even in 
conversation is curbed by a military despotism. When 
a long-standing and strongly established dictatorship 
breaks down, moreover, there is too frequently a period 
of disorder which destroys all of the advances made 
during years of peace. The entire organization of the 
government, built aroimd one commanding figure, goes 



OF CENTRAL AMERICA 41 

to pieces when the leader, either through death or 
incapacity, is compelled to relax his hold; and it is very 
rarely that a new man is at once fomid who is capable 
of keeping the administrative machine together. In 
those comitries, such as Costa Rica, where the presi- 
dency is a position of less influence and profit, and where 
the custom of rotation in office prevails, it is compara- 
tively easy to settle the question of the succession peace- 
ably, in accordance with the law or by an agreement 
between the poHtical leaders; but where all parties have 
been subjected for years to the autocratic rule of one 
man, and compelled himibly to obey his commands, none 
of the factional chiefs can tolerate the thought that a 
personal rival may succeed to the same position. For 
this reason, the fall of a Central American dictator is 
generally followed by a more or less prolonged civil 
war, which only ends when one group of men succeed 
in imposing their will upon the others. 

It would be impossible for a single individual, who 
can rely neither upon the loyalty due to an hereditary 
sovereign nor upon the prestige enjoyed by a chief 
magistrate chosen by a majority of the people, to impose 
his absolute authority upon the whole nation, were it not 
for the peculiar political conditions existing in Central 
America. In all of the five republics, the common people 
show little hostihty to despotism as such and little dis- 
position to attempt to influence the selection or to guide 
the policy of their rulers. Neither the illiterate and 
oppressed Indian mozo of Guatemala nor the prosperous 
and conservative concho of Costa Rica has any real con- 
ception of the meaning or of the possibilities of demo- 
cratic institutions, and both are willing to leave the 
conduct of political affairs to their superiors. For them, 
the government, with the forced military service and the 
compulsory labor on public works which it demands, is 
simply a necessary evil, and attempts to change its 
personnel by civil war arouse more dismay than enthu- 



42 THE FIVE REPUBLICS 

siasm. Few among the lower classes enter into revolu- 
tionary uprisings voluntarily. The upper classes, on 
the other hand, are interested in politics not so much 
for the sake of principles or policies, as because they 
wish to secure a share of the offices and spoils which 
provide many of them with a comfortable living at the 
expense of the rest of the community. There are among 
them many professional politicians and military leaders 
who have no other lucrative occupation, and the number 
of these has been swelled considerably in recent years 
by the fact that the commerce and to a less extent the 
large scale agriculture of the five republics have fallen 
under the control of foreigners, leaving many formerly 
wealthy native families impoverished. By the use of 
offices and money, therefore, the government can always 
secure adherents and build up a strong following, the 
members of which are deeply interested in its remaining 
in power because their positions depend upon it. It is 
upon a political organization of this kind, and upon the 
army, that the president must rely for holding in sub- 
jection his personal enemies and the mass of the ignorant 
and indifferent common people. 

The military force is the chief support of the govern- 
ment. The highest officers in this are usually influential 
and trusted members of the president's party, for the 
very existence of the administration depends upon their 
loyalty. The standing army itself is composed of a few 
thousands of ragged, barefooted conscripts of the most 
Ignorant type, commanded by professional soldiers of 
little education or social position, who have in many 
cases risen from the ranks themselves. Theoretically 
every male citizen is liable to military service, but in 
practice all but the poorest classes secure exemption 
in one way or another. There is little fairness or system 
in recruiting. When additional soldiers are needed, the 
required number of peasants or laborers are simply 
seized, taken to the cuartels, and forced to enlist for a 



OF CENTRAL AMERICA 43 

longer or shorter period, whether they have akeady per- 
formed their legal service or not. When news is re- 
ceived that troops are being raised in a given vicinity, 
every able-bodied man goes into hiding; and in certain 
capitals, one frequently sees small parties of " volun- 
teers," bound with rope and under a heavy guard, being 
brought in from the country to augment the garrison. 
Since soldiers of this type think httle for themselves, 
and follow blindly the commands of their leaders, it is 
the latter who really control the army. In spite of the 
immense power which they might exert, however, these 
officers are usually merely the tools of the civilian 
politicians, who secure their support by giving them 
money and conferring military honors upon them. 
Although each repubhc has been governed at times 
during its history by men who were professional soldiers, 
the number of real mihtary dictators has been surpris- 
ingly small. 

Although the great historic political parties have dis- 
integrated, and in some states have disappeared alto- 
gether, there is always a more or less open and organized 
opposition to the government, made up of the rivals of 
the men in power and of the discontented elements 
which have not received their share of the offices and 
spoils. These factions, in the main, simply represent 
personal and local jealousies and ambitions. Their 
members are held together by ties of blood and of 
friendship, always potent in a Latin American country, 
but especially so in these httle repubhcs, whose people 
have until recently had comparatively little intercourse 
with the outside world and have become closely related 
by continual intermarriage. Enmities between prom- 
inent families become especially bitter in such com- 
munities, as does also the jealousy between different 
towns and villages, which, though but a few miles apart, 
have little commercial or social intercourse with one 
another. Questions of national pohcy, and plans for 



44 THE FIVE REPUBLICS 

the development of the national resources play a small 
part in political contests. The prominent leaders are 
not so much the representatives of theories or tendencies 
as men who have won the confidence and loyalty of the 
people of their towns and villages, or who are the heads 
of powerful family connections, and the intrigues and 
the struggles for power between such men and their 
foUowings are the principal motive of the civil wars 
which are still so frequent in many of the five republics. 
The factions which dispute the control of the govern- 
ment in the four northern republics still call themselves 
Liberals and Conservatives, but there is at the present 
t;ime little difference in their policies or in the character 
of their membership. They are in reality mere com- 
binations between the ambitious leaders of smaller 
groups, each of whom is striving to advance his own 
fortunes and those of his friends. 

The animosities created by former civil wars, however, 
as well as the bitterness of the struggles for office at the 
present time, still make the feeling between the different 
factions very intense. In some of the republics, each 
group of men which has secured control of the govern- 
ment has endeavored to consolidate its power, and to 
avenge its members for past injuries at the hands of the 
party which it has overthrown, by severe and often 
utterly unjustifiable treatment of its defeated enemies. 
The latter are frequently reduced to a point where they 
find life in their own country almost intolerable. The 
more influential leaders of the opposition are exiled or 
imprisoned, and sometimes deprived of their property 
by confiscation or forced loans, and the rank and file of 
the party are subjected to all of the persecutions which 
the greed or the vindictiveness of the new authorities 
may suggest. Many of the measures taken are really 
necessary, especially when there is danger of a counter 
revolution; but they do much to keep ahve a bitter 
personal hatred between the rival groups of politicians. 



OF CENTRAL AMERICA 45 

Within the last few years, the realization of this fact has 
led the governments of many of the republics to adopt 
a more hmnane and civihzed policy, but the customs 
formed during a century of civil w^ar have made the 
execution of such a poHcy very difficult. 

The fact that the control of the government is seized 
and held by each succeeding administration by force 
naturally inclines the victorious party to treat it as the 
spoils of v^ar. A sweeping change of employees, from 
cabinet ministers to janitors, takes place upon the acces- 
sion of each new president, and causes a demoralization 
of the public service which can easily be imagined. Not 
only are inexperienced and inefficient men given official 
positions, but the pay roll is loaded down with salaries 
to useless or purely ornamental functionaries, appointed 
as a reward for political services. The schools and 
certain other governmental activities, such as the tele- 
graphs, are to a slight extent saved from the general 
disorganization by the fact that the small salaries paid 
and the special abilities required in them make the 
positions unattractive to the sinecure-hunting professional 
politicians ; but even in these, the experienced and faithful 
employee has no chance against the man who has power- 
ful friends. 

Favoritism in appointments is not, however, so grave 
an evil as the graft which is more or less prevalent in the 
governments of all of the five republics. This corrup- 
tion is due partly to the tendency to regard official 
positions as the fruits of a temporary victory, from 
which as much profit as possible is to be secured while 
the domination of the party in power lasts, and partly 
to the fact that it is impossible for many of the employees 
to live on their ridiculously inadequate and often irregu- 
larly paid salaries. In some of the countries, where there 
have been long periods of despotic government by one 
man, who has subordinated every other consideration to 
the maintenance of his personal following and the con- 



46 THE FIVE REPUBLICS 

solidation of his power, conditions are almost incredibly 
bad. From the postal clerk who steals illustrated re- 
views out of the mail boxes, to the high official who 
mysteriously becomes the owner of large amounts of 
property during his tenure of office, the servants of the 
nation rob their fellow-citizens by an infinite variety of 
methods. The President and the ministers derive profits 
from the granting of concessions and contracts; the local 
officials exact tribute from those who depend on them 
for protection; and every other employee who has regu- 
lations to enforce or favors to dispense endeavors to 
secure small sums from those who are affected by his 
performance of his duties. Under these military dic- 
tatorships, the irresponsible authority enjoyed by the 
officials, and their continual abuse of their position, 
result eventually in a deplorable vitiation of political 
ideals and official morality among the members of all 
parties, for the opponents of such an administration, on 
coming into power in their turn, are too often unable 
to resist the temptation to follow the example of their 
predecessors, and to avenge and indemnify themselves 
for their sufferings at the hands of their enemies. 

The most harmful corruption is that which exists in 
the courts. Cases are too often decided with regard 
only to the influence of the persons involved or to the 
inducements which they hold out, and poHtical consid- 
erations play a very large part wherever they arise. In 
some countries, in fact, the President has often inter- 
vened openly in judicial questions, forcing the magis- 
trates to decide them as he desired. Where the evidence 
makes impossible or ridiculous the verdict which the 
court would like to render, cases are very likely to be 
held up indefinitely by the loss of necessary documents, 
or the decision is purposely made invalid by allowing 
technical defects in the procedure. A magistrate who 
attempts to perform his work conscientiously frequently 
has his decisions reversed by the upper courts or left 



OF CENTRAL AMERICA 47 

unexecuted by administrative officials, and is himself not 
unlikely to be deprived of his position. 

Such corruption, however, has reached its extreme de- 
velopment only in a few cases, where particularly un- 
scrupulous men have obtained absolute control of the 
government. In the majority of the five republics, graft 
flourishes to an alarming extent, but is neither so uni- 
versal nor so disastrous to the pubhc morals. Ideas of 
official virtue are rather lax among most of the pro- 
fessional politicians, but there are nevertheless com- 
paratively few who do not show a sincere desire to carry 
out the duties of their offices faithfully and efficiently, 
even though profiting at the same time from their position 
in ways which an Anglo-Saxon official would consider 
illegitimate. In Costa Rica, as we shall see, the employees 
of the government receive fairly adequate salaries, which 
imder normal conditions are regularly paid, and, in con- 
sequence perhaps of this fact, perform their duties as 
honestly and efficiently as the officials of the average 
North American state. In each of the other govern- 
ments, there are officials whose integrity is above sus- 
picion. These, however, are the exception rather than 
the rule, and graft will apparently always be one of 
the most salient characteristics of Central American 
administration so long as the moral standards and 
political conditions of the Isthmus remain what they 
are. 

The execution of the criminal laws is usually lax and 
sometimes corrupt. The members of the upper classes 
can generally evade punishment, or at least escape with 
light penalties, even when they have committed a serious 
offense, provided the offense be not political. There is 
none of the five countries in which atrocious murders 
have not been committed with impunity, and frauds of 
a disgraceful character carried out without fear of justice, 
by persons of social prominence, within very recent years. 
"Where the lower classes are involved, the laws are en- 



48 THE FIVE REPUBLICS 

forced rather more severely, but in an irregular manner, 
and criminals frequently escape punishment through the 
venality or the carelessness of the courts or of their 
jailers, when there are no special circimistances to make 
the government anxious to hold them. Those who are 
convicted and sentenced are usually employed under a 
heavy guard on public works, and receive in return for 
their labor a small amount of money with which they can 
buy food. The death penalty is very rarely enforced for 
any non-political crime, although it is said that it is the 
custom of the mihtary officials in some of the countries 
to shoot suspects at the time of their arrest, in order to 
avoid the trouble and expense of trying them. Notwith- 
standing the inactivity of the officials, however, there is 
not a large amount of brigandage in Central America, 
and deeds of personal violence, if we except the bloody 
encounters which occur every Sunday under the influence 
of aguardiente, are comparatively few. The people seem 
to be peaceable and law-abiding by nature, even in places 
where there is no organized force to hold criminals in 
check. 

The worst features of the Central American govern- 
ments are due chiefly to the fact that the officials are 
subject to so little control by pubUc opinion. Those who 
benefit by the acts of the administration support it what- 
ever its defects, while those who do not, oppose it regard- 
less of its merits. The sentiment of the ruling class as 
a whole may influence the government in non-political 
matters, but in taking measures to strengthen their own 
position the president and his advisors are rarely deterred 
by considerations of legality, popularity, or morality. 
An administration does not weaken itself so much by 
the violation of rights guaranteed by the constitution as 
by faihng to provide offices and other rewards for its 
own supporters. The press, as a means for shaping 
pubHc opinion, has little political importance, for even 
in those countries where it is not subject to a close 



OF CENTRAL AMERICA 49 

censorship, the majority of the newspapers are too 
partisan or too venal to command general respect. 

The only remedy against bad government is revolu- 
tion. This, unfortunately, almost invariably proves 
worse than the evil which it seeks to cure. The civil wars 
of the last ninety-six years have wrought incalculable 
harm in all of the five republics except Costa Rica, not 
only by the destruction of lives and property, but by 
making force the only basis of authority, and by placing 
men of mihtary abihty rather than constructive statesmen 
in positions of power. The numerous Central American 
patriots who have worked with all their will and energy 
for the establishment of efficient administration and the 
economic progress of their countries have found their 
efforts nullified by the continual disorder which has made 
peaceful evolution impossible. Time after time, by an 
outbreak of civil war, all classes of the population have 
been forced to suspend their regular occupations, and 
crops, Hvestock, and other property have been carried off 
for provisions or for loot. . Under such conditions there 
is little incentive for the natives to develop their agri- 
cultural properties or for foreigners to invest money in 
railways or in mines. The resources and energies of the 
governments, wasted in maintaining their military su- 
premacy over their enemies, have not been available for 
?he construction of the much needed roads and railways 
or for the execution of the sanitary measures which are 
all but indispensable in a tropical country. As the result 
of these conditions some of the republics of the Isthmus 
have made little progress since their declaration of 
independence, although those which have enjoyed com- 
parative peace have advanced rapidly in prosperity and 
civihzation. The first requisite for the improvement of 
the economic and political conditions of Central America 
is the substitution of some peaceful means of changing 
the personnel of the governments for the costly and 
destructive method of revolution. 



CHAPTER III 
GUATEMALA 

Political History — The Government — The Indian Population — The Contract 
Labor System — Production of Coffee and Other Crops on the South Coast — 
Means of Transportation — Outlying Sections of the Country. 

Guatemala is the most important of the five Central 
American repubHcs. Her two milhons of people form 
about forty per cent of the entire population of the 
Isthmus, and her commerce is greater than that of any 
of the other four countries. Although in many respects 
less advanced than Costa Rica and Salvador, her wealth 
and her strongly organized government, supported by a 
formidable army, have always enabled her rulers to play 
the leading part in the international politics of the 
Isthmus, and even to exert a decisive influence in the 
internal affairs of her neighbors. 

The people of the Republic Hve for the most part on 
the plateaus along the Pacific Coast, not far from a chain 
of lofty volcanic peaks which fringe the interior table- 
land on the south, and on their farther side slope abruptly 
down to the low coastal plain. Of the many populous 
towns in this region, by far the greater number were 
prosperous and rather highly civilized communities cen- 
turies before Columbus discovered America. They are 
still inhabited mainly by Indians, although in each place 
there is now an upper class of white merchants, planters, 
and professional men. 

For several years after the declaration of independ- 
ence, the history of Guatemala, as we have seen, was 
closely connected with that of the federal government. 
The Liberal state administration, which Morazan had 
installed, maintained itself in office until 1838. It was 

50 



REPUBLICS OF CENTRAL AMERICA 51 

overthrown by a revolt among the bigoted and ignorant 
ladinos east of the capital, who were persuaded by the 
priests that an outbreak of cholera in the preceding year 
was due to the poisoning of the rivers by the authorities. 
The Liberals retired to the western city of Quezaltenango, 
where they attempted to set up an independent state, but 
they were completely defeated by the Conservative army 
in 184Q. Rafael Carrera, a half-breed peasant who had 
led the popular uprising, was for a generation the most 
powerful personage of Central America. Becoming 
president in 1844, he retained this office during the 
greater part of the period from then until his death in 
1865, although the difficulties arising from renewed 
Liberal revolts caused him to resign twice for short 
intervals. In 1854, he was made president for life. 
Carrera was an absolute despot, fond of the trappings 
of supreme power, but in political matters somewhat 
subject to the control of the leaders of the Conservative 
party and the ecclesiastical authorities. The policy of 
his government was therefore shaped by the great 
families and by the Church, and the more liberal and 
progressive elements in the community were not allowed 
to express their opinions or to take part in public affairs. 
One of the early acts of the Conservative adminis- 
tration was the repudiation of the federal union. The 
wealthy classes of the capital had suffered so much from 
the disturbances attending that ill-starred experiment, 
and had been put to so much expense in organizing 
expeditions to uphold the authority of the federation in 
the other states and in defending the central authorities 
against attacks from outside, that it is not surprising 
that they preferred to sever all connection with their 
turbulent neighbors. During their entire tenure of 
power, it was their policy to discourage the restoration 
of the union, not only by refusing to accede to any 
proposals tending to this end, but also by intervening 
by intrigue and even by force in the internal affairs of 



52 THE FIVE REPUBLICS 

their neighbors when the plans of the unionist party- 
could not be frustrated in any other way. 

After the death of Carrera, and during the adminis- 
tration of Vicente Cerna, his successor, the Liberals re- 
newed their activities in opposition to the government, 
and finally succeeded in 1871 in overthrowing it by 
revolution. The first president under the new regime 
was Miguel Garcia Granados. He was succeeded in 
1873 by the real leader of the party. General Justo 
Rufino Barrios, under whose masterful leadership the 
Conservatives were completely crushed. The religious 
orders, which had been very powerful, were expelled 
from the country and deprived of their property, and 
a similar fate overtook the heads of the old aristocratic 
famihes. Liberal reforms of all kinds were introduced 
in theory if not always in practice, and provision was 
made for the building of railways, the encouragement 
of agriculture, and the establishment of schools. Barrios' 
great ambition was the restoration of the Central Ameri- 
can union, but his efforts to secure the co-operation of 
the other governments of the Isthmus for this purpose 
met with little success. It was in an attempt to accom- 
plish this object by force that he met his death, for he 
was killed in a battle against the army of Salvador in 
1885. 

Manuel Lisandro Barillas, one of the designados, or 
vice-presidents, succeeded Barrios and held office until 
1892. At the expiration of his term, not having the 
strength nor the desire to remain in power, Barillas held 
the only comparatively free election in the history of the 
Republic, and Jose Maria Reyna Barrios, a young nephew 
of the great Liberal leader, became President. Although 
capable and energetic, this ruler was so extravagant in 
his expenditure of the public revenues that his death by 
assassination in 1898 left the Republic in a very serious 
financial condition. This was intensified by the political 
difficulties which confronted the first designado, Manuel 



OF CENTRAL AMERICA 53 

Estrada Cabrera, when the latter took control of the 
administration. After a few months of tension, how- 
ever, the new chief executive succeeded in establishing 
the legal authority and in overcoming some of the prob- 
lems confronting the national treasury. He is still at 
the head of the state, after nineteen years of service. 
The dense ignorance and the oppressed condition of 
the masses of the people, combined with the bitter fac- 
tional strife among the upper classes, where party hatred 
has probably been stronger than in any of the other 
Central American countries, have caused the govern- 
ment of Guatemala to became a military despotism, 
more absolute than any other on the Isthmus. The 
administration firmly maintains its authority by means 
of a large standing army and police force, and promptly 
and mercilessly checks the slightest manifestation of 
popular dissatisfaction. An elaborate secret service 
attempts, with a large measure of success, to inform 
itself fully of everything which occurs in the Republic. 
Supposed enemies of the party in power are closely 
watched, through their neighbors, their servants, and 
even through the members of their own families, and 
foreigners coming to the country often find themselves 
shadowed until the details of their business are dis- 
covered. It is dangerous to express an opinion on 
pohtical matters even in private conversation. Much 
of the mail, and especially that coming from abroad, 
is opened and read in the post office. The formation 
of social clubs is discouraged because of possible political 
results, and it is impossible for a man prominent in 
official circles to have many friends without arousing 
distrust. Persons who fall under suspicion are im- 
prisoned or restricted in their liberty, or even myste- 
riously disappear. The ruthless execution of large 
numbers of persons, many of whom were probably 
innocent, have followed attempts to revolt or to assassi- 
nate the President. This reign of terror is approved by 



54 THE FIVE REPUBLICS 

many influential natives and by the majority of the 
foreigners in the country on the ground that only a 
very strong government can prevent revolution and 
maintain order; and there is no doubt that the life and 
property of foreigners, at least, has been safer in Guate- 
mala than in some of the other Central American 
countries. The omnipresent spy system, however, and 
the cruel treatment meted out to those who incur the 
displeasure of the authorities, have created an atmos- 
phere of mutual suspicion and fear, especially in the 
capital, which has noticeably sapped the spirit and the 
self-respect of the people. Patriotism and national pride 
have to a great extent been destroyed by the ban on 
the discussion of important national questions, and the 
country has thus probably become less rather than more 
fit for self-government during the last two decades. 

Although the presidents, almost without exception, 
have shown great force of character and marked admin- 
istrative ability, the subordinate officials are very fre- 
quently inefficient and corrupt. Official morality seems 
to be growing worse rather than better, apparently 
as a direct result of the depreciation of the currency, 
which has not been accompanied by a corresponding 
increase in salaries. The highest employees, such as the 
ministers and the judges of the Supreme Court, receive 
the equivalent of about fifty dollars a month, and the 
remuneration of minor functionaries varies from one 
dollar to twenty dollars. Posts in the government, 
consequently, have little attraction except for those who 
desire them because of the opportunities which they 
afford for graft, and respectable persons, who are often 
appointed to professorships in the schools or to other 
positions requiring special knowledge and experience, 
accept only because they are practically compelled to. 
The great majority of the administrative and judicial 
officials are men of a rather low type, and bribery, theft, 
and oppression are consequently very prevalent. The 



OF CENTRAL AMERICA 55 

fact that the superior authorities do not punish or dis- 
courage even the most flagrant corruption gives rise 
to the suspicion that they are willing to have their 
subordinates recompense themselves in this way, in 
order not to be forced to pay them salaries out of the 
national treasury adequate for their support. 

Notwithstanding the corruption in the government 
and the exploitation of the people for the benefit of the 
official class, there is at least a pretense of public-spirited 
administration. Humanitarian laws are put on the 
statute books and praised in the newspapers; the cities 
are beautified by laying out parks and erecting monu- 
ments; magnificent buildings for schools, hospitals, and 
other public institutions are constructed; and the pro- 
gressiveness and benevolence of the administration are 
heralded by subsidized vn-iters, not only in Central 
America, but even in the United States and Europe. 
The motives of the government are no doubt praise- 
worthy, but the actual good accomplished has not been 
great. The execution of the reforms has been left to 
officials who had no understanding of their spirit and 
who were in many cases deterred by their own interests 
from carrying out their provisions; and the schools and 
other public institutions have never been properly 
equipped or provided with adequate teaching staffs 
because of the failure to appropriate money for these 
purposes. 

Although all power is centered in the hands of one 
man, the forms of the constitution are still observed and 
elections are held regularly in accordance with the law. 
They are, moreover, participated in, not by a few chosen 
voters, as in some other Central American countries, but 
by the entire body of citizens. In a presidential election, 
especially, all classes of the population are rounded up 
by the military and taken to the polls, where they exer- 
cise a right of suffrage restricted only by the fact that 
they are not permitted to vote for any but the official 



56 THE FIVE REPUBLICS 

candidates. The number of votes for the re-election of 
the president thus equals, when it does not exceed, 
the total number of adult males in the Republic. 

Since the breakdown of the Central American federa- 
tion, Guatemala has suffered from fewer successful 
revolutions than any other state of the Isthmus. The 
Republic has been by no means free from internal dis- 
order, but at least it has not been subjected to the 
continual demoralizing changes of regime which have 
occurred so frequently in its neighbors. This com- 
parative stability has been in part due to the strong 
organization which the government inherited from its 
Spanish predecessors. The Captain General and the 
royal audiencia in Guatemala City had naturally en- 
joyed more prestige and had possessed more means of 
making their authority respected than had the subordi- 
nate governors in the provinces in colonial days, and the 
old administrative machinery and traditions were main- 
tained to some extent after the declaration of independ- 
ence. Moreover, the country has had a series of able 
rulers, holding office generally for life, who have crushed 
all opposition with little regard for constitutional pro- 
visions or public opinion, and who have almost always 
been able to defeat attempts at revolution and to 
arrange for the succession of a president of their own 
choosing. There are, of course, turbulent elements 
which make occasional attempts to overthrow the gov- 
ernment, but their influence has been much less than 
in Honduras, Nicaragua, or Salvador because of Guate- 
mala's racial and economic conditions. 

Among the upper classes, although they are divided 
among themselves by bitter political feuds, and although 
there are many powerful families which have suffered 
indescribable outrages at the hands of governments of 
opposite political faith, the revolutionary spirit seems 
at present to be conspicuously absent. The majority 
of the white families who own plantations upon which 



OF CENTRAL AMERICA 57 

they employ Indian labor are more interested in the 
maintenance of peace than in obtaining offices for 
themselves by a revolt which would cause their work- 
men to be recruited into the army and would perhaps 
lead to the destruction of their properties. The diffi- 
culty of overthrowing the government, with its large 
standing army and its superior military equipment, and 
the terrible consequences which follow an unsuccessful 
attempt to do so, deter those who have anything to 
lose from engaging in political agitation. 

The half-breed middle class, which is usually a cause 
of disturbance in the neighboring republics, plays but 
a small part in politics. The ladinos, as they are called, 
occupy an economic and social position between that 
of the Indian laboring population and the landed pro- 
prietors, being employed as artisans, small tradesmen, 
and minor public officials in the towns, and as car- 
penters, mule drivers, and skilled laborers in the country. 
In the districts east of the capital, where there are few 
full-blooded Indians, the ladinos work on the plantations 
or on their own small patches of ground. Many of 
the more intelligent rise from humble origins to high 
positions, but the majority are ignorant, dishonest, and 
vicious, and form one of the least desirable elements in 
the community. Their importance, however, is small, 
as compared with that of the other classes. 

The great majority of the inhabitants of the Republic 
are docile and ignorant pure-blooded Indians. These 
have never shown any liking or capacity for war since 
the first small force of Spanish invaders conquered their 
populous kingdoms at the beginning of the sixteenth 
century. Political agitators have rarely been able to 
incite them to resistance to the authorities, for whom 
they have a deep-rooted respect and fear; and for this 
reason the organization of a revolutionary army among 
them is more difficult than among the turbulent half- 
breeds of the other Central American countries. For 



58 THE FIVE REPUBLICS 

the government, on the other hand, they make patient 
and obedient, if not very intelligent, soldiers. Many of 
them are raised to high military offices, for their lack 
of interest in political affairs makes them more de- 
pendable than the white or ladino officials. They are 
on the whole, therefore, an influence on the side of 
peace. 

Guatemala is the only one of the Central American 
countries where the aboriginal population still main- 
tains its identity as a distinct race. In other parts of 
the Isthmus the Indians were exterminated by thou- 
sands during the first century of Spanish rule, and 
those who survived were assimilated into the European 
communities to such an extent that they adopted the 
language and customs of their conquerors everywhere 
except in a few outlying districts. In Guatemala this 
did not take place, partly because the population was 
more compact and more civilized at the time of the 
conquest, and partly because the natives received more 
protection in their rights from the Spanish authorities 
in the capital than in the provinces. The Indians were 
of course subjected to the encomienda system just as 
were those of Honduras and Nicaragua, but the reparti- 
mientos worked less harm among them than in those 
countries because their great number made the ex- 
ploitation of the whole population by the small groups 
of Spaniards impossible. The Indians are still sharply 
set apart as a class from the half-breed and white 
population. In many places they are almost entirely 
unacquainted with Spanish, although their native lan- 
guages, of which it is said that there are nineteen spoken 
in the Kepublic, are becoming more and more contam- 
inated by Castilian words and phrases. The inhabitants 
of each village still maintain the distinctive costumes 
and in some places retain traces of the religious observ- 
ances of pre- Spanish days; and wherever they have been 
left to themselves they still carry on agriculture and 



OF CENTRAL AMERICA 59 

their primitive household industries in much the same 
way as before the conquest. 

The failure of the Indians to assimilate with the 
white population caused them to remain in the position 
of a subject race. Even after the abolition of the 
encomiendas they were still compelled to labor for little 
or no remuneration on the plantations of the white 
landowners, for it became the practice for the au- 
thorities to recruit a number of them by force and to 
send them anywhere where their services were needed, 
either as a special favor to the beneficiary or for a 
money consideration paid into the treasury. These 
mandamientos, as they were called, were the chief means 
by which agricultural laborers were secured until nearly 
the end of the nineteenth century. After the establish- 
ment of the large coffee plantations, however, they were 
found to be entirely inadequate for providing the large 
and regular supply of labor which was necessary for 
the new industry, and the system has been to a great 
extent superseded, although not entirely done away with 
by the present Ley de Trabajadores, enacted in 1894. 

This law defines two classes of laborers or mozos: 
colonoSj who reside permanently on the plantation, and 
jornaleros, who sell their services for a longer or shorter 
period by contract. The former usually work for the 
employer only a part of each month in return for the 
land which he allows them to cultivate. This system is 
most common in the Alta Verapaz, where the planta- 
tions have great amounts of land unsuitable for coffee 
cultivation, and where the Indians, who until a short 
time ago had lived a life of complete freedom in the 
forest, are less amenable to control than on the South 
Coast. The laborers there are for the most part natives 
who lived upon the land before it was purchased by 
the present owner, and who had no recourse, after the 
establishment of the plantation, but to accept their new 
status or to leave their homes. They are on the whole 



60 THE FIVE REPUBLICS 

better off than the jornaleros because they enjoy more 
independence and are able to work part of the time 
for themselves. 

The jornaleros, or day laborers, are held on the plan- 
tations under a peonage system. Theoretically the 
Indian is perfectly free to contract himself or not as 
he pleases, but when he has once done so, he may not 
leave his employer's service until he has completed the 
time for which he agreed to work and has repaid any 
money which the patron may have lent him. If he 
attempts to escape, he is hunted down by the authori- 
ties and returned to the plantation; and the entire 
expense of capturing him and bringing him back is 
debited in his account. If, on the other hand, he refuses 
to work, he may be imprisoned until he is in a more 
reasonable frame of mind. Those who still prove 
obstinate, after fifteen days in jail, may be sent at 
the request of the employer to the convict labor squads, 
where fifty per cent of the returns of their labor are 
set aside for the benefit of their creditors. The whole 
system depends upon keeping the mozo in debt. For 
this purpose, he is allowed a limited amount of credit 
at the plantation store and is even loaned small sums 
of money from time to time if necessary. Few are 
sufiiciently energetic or ambitious to make a serious 
effort to free themselves from these obligations. They 
have in fact Uttle incentive to do so, for those who leave 
the plantation can only look forward to similar employ- 
ment elsewhere, or what is much worse, to impressment 
into the army, from which mozos working on large 
coffee, sugar-cane, banana, or cacao plantations are 
legally exempt. 

The law imposes on the employers certain obhgations 
which are more or less faithfully observed. In most 
cases, huts are provided for mozos of both classes, and 
food is dealt out to them when the supplies of food 
which they themselves raise are exhausted. The jor- 



OF CENTRAL AMERICA 61 

naleros, in fact, are fed almost entirely by their em- 
ployers, although they are frequently given small patches 
of ground for gardens and are allowed three or four 
weeks during the year in which to cultivate them. The 
planter distributes medicines and even furnishes amateur 
medical advice when it is needed. Free schools, required 
on all by law, are maintained on some plantations, 
although as a rule they are attended only by the children 
of the ladino employees, for the Indians do not care 
about educating their children and are generally not 
compelled to do so. The owner of the plantation is 
responsible for the maintenance of order, and is em- 
powered to imprison criminals and fugitives from labor 
until the local authorities can take charge of them. In 
these duties he is assisted on the larger plantations by 
an alcalde auociliar, an official appointed by the munici- 
pal alcalde from a hst of names submitted by the owner. 
This functionary, who nominally represents the author- 
ity of the government, but is in reality an employee 
of the planter, is an invaluable aid to the latter in 
maintaining his control over the laborers. 

The wages paid to laborers are at the present time 
extremely low, for they have risen little in spite of the 
rapid depreciation of the national currency. The 
jornalero or colono on the average plantation, in ad- 
dition to a limited amount of very simple food, receives 
from two to three pesos (from Gve to eight cents in 
United States currency) a day, whereas voluntary 
laborers, upon whom the planter has no hold, receive 
from five to seven pesos for precisely the same work. 
It is customary in most places to pay by the task, so 
that those who are most efficient may earn slightly more 
than this sum, while those who are weak or incapable 
will receive less. Considering that the Indian enters 
the service of the planter owing the fifty or one hundred 
pesos which it is customary to advance to him when he 
is contracted, it is not surprising that he is unable to 



62 THE FIVE REPUBLICS 

free himself from debt, especially as the few articles 
which he must buy — clothes, tools, and candles for the 
church or chapel — are relatively very expensive. The 
combined earnings of the whole family, for the women 
and children are usually given tasks as well as the 
men, are in fact hardly sufficient to supply the neces- 
sities of life without an occasional extra loan from the 
employer. 

This peonage system, in itself pernicious, is subject 
to the gravest abuses. The short-sighted and improvi- 
dent Indians are easily persuaded to accept advances 
of money when they have some immediate occasion, 
such as a baptism or a funeral, for spending it, without 
realizing apparently the onerous conditions under which 
they must make repayment. The professional habilita- 
dores, or contractors of labor, and the agents whom 
many of the planters maintain in the native villages, 
take advantage of this fact and of the other weak- 
nesses of the Indians' character to obtain a hold upon 
them. This is made much easier by the aborigines' 
fondness for liquor and by their helplessness when 
drunk. The Indians are often induced to sign con- 
tracts by misrepresentations or even actual violence, 
for the corrupt and unscrupulous local authorities not 
infrequently bring pressure to bear upon them by 
threats of arbitrary imprisonment or of impressment 
into the army. Many of the representatives of the 
government derive a large income from considerations 
paid them for service of this kind and from tributes 
which they exact every month or every year from the 
planters in their districts as the price of official support 
in disputes with their laborers. That the contracts are 
rarely entered into voluntarily and with a full apprecia- 
tion of their terms is evident from the great difference 
in the wages received by those who work under them 
and the wages earned by the so-called voluntary laborers. 
The government has made half-hearted attempts ta 



OF CENTRAL AMERICA 63 

check the worst features of the system, but its decrees 
enjoining strict respect for personal hberty and stipu- 
lating minimum wages for contracts made in the future 
have for the most part been left unexecuted by the 
local officials. 

The contract labor system is defended in Guatemala 
on the ground that the cultivation of coffee, upon which 
the prosperity and the commerce of the country depend, 
could not be carried on without it. The Indian, it is 
said, would never work for more than a few days in 
the year unless he were compelled to, as he is perfectly 
contented with a few possessions which he can obtain 
for himself by cultivating a small patch of ground in 
the woods. The planters complain of a scarcity of 
labor even at the present time, and often find it difficult 
to cultivate their properties and harvest the crops. This 
argument explains, but hardly justifies, the system. An 
institution which subjects the masses of the people to 
a degrading bondage, and which prevents these masses 
from progressing or becoming more fit for the self- 
government which they are nominally supposed to exer- 
cise, must in the long run be extremely harmful to the 
country as a whole. The development of agriculture 
and commerce, which has been beneficial chiefly to 
foreign investors, can hardly be said to be desirable if 
it has made social and political conditions within the 
country worse. While the Indians are practically serfs, 
living under the most primitive conditions and deprived 
of any opportunity to better their position, it will be 
impossible to educate them or to raise their standard 
of living. 

There is, moreover, no conclusive proof that the 
Indians would refuse to work if they were not forced 
to by the labor laws and the tyranny of the officials. 
They naturally do everything they can to escape em- 
ployment under the present conditions, where they 
receive in return for their labor nothing but the bare 



64 THE FIVE REPUBLICS 

necessities of life. These they could obtain for them- 
selves, almost without working, if they were left in 
their original condition in the forest. There is no reason 
to suppose, however, that they would refuse employment 
at wages which were really worth their while. They are 
certainly not a more lazy race than their half-breed 
neighbors, and they would doubtless improve their 
standards of living, which are today no lower than 
those of the ladinos in the more backward parts of 
Honduras and Nicaragua, if they were given an op- 
portunity to do so. Nor would the cost of coffee grow- 
ing be so increased as to make it prohibitive. In Costa 
Rica and Salvador, where the wages are from four to 
eight hundred per cent higher than in Guatemala, the 
planters are prosperous and make large profits. Under 
the present system, the underfed and ill-treated Indians 
are unwilling and inefficient workers, and their services 
involve a great extra expense to the employer in the 
form of sums to be paid to habilitadores and local officials 
in return for aid in contracting them. This money 
would be saved, and the value of the Indians as laborers 
would certainly be greatly increased, if the peonage 
system were done away with and the workers were freely 
employed at fair wages. 

There are some thousands of Indians, especially in 
the less developed parts of the Republic, who still culti- 
vate their own properties or a share in the common 
lands of their villages, raising not only the corn and 
beans with which they feed their families, but also a 
small surplus which they carry long distances to sell 
in the markets in the towns. They seem to delight in 
the free life of the mountain trails, where the traveler 
continually passes long hnes of them, in their pictur- 
esque local costumes, carrying vegetables, home-made 
cloth, baskets, and grass mats — the men with heavy 
burdens in the peculiar square frames on their backs, 
and the women with baskets or bundles poised on their 



c^ 



OF CENTRAL AMERICA 65 

heads. Many of them come to the capital from places 
several days' journey distant, camping by the side of 
the road at night, and reach their destination nearly as 
quickly as more aristocratic travelers do on mule back. 
Besides those who market their own products in this 
way, there are large numbers of professional cargadores, 
who spend their lives on the roads, taking goods from 
one place to another for hire or as a commercial specu- 
lation. They are said to cover as much as thirty miles 
a day with a load of one hundred pounds, and they 
form one of the most important factors in the internal 
transportation of the country. 

These free Indians work only part of the time or not 
at all on the plantations. When they do work, it is 
usually as " volunteers " at the time of the harvest. 
Their number, however, is constantly diminishing. As 
the extension of the coffee plantations has made the 
demand for laborers more and more insistent, it has 
become increasingly difficult for the Indians to escape 
from the snares of the habilitadores and the pressure 
exerted by the local officials, so that those in the more 
developed agricultural districts have with few exceptions 
been persuaded or forced into service on the plantations. 
Many of the Indians who lived on the public domain 
have been forced to work for the foreigners who pur- 
chased from the government the land which they had 
formerly cultivated, for it has been the regular practice 
in some parts of the country to secure new mozos in 
this way. Even those who once owned land of their own 
have often sold it to their wealthier neighbors. 

At the present time the situation of the Indians is 
probably worse than it was fifty years ago, and it is 
certainly worse than that of the lowest classes in the 
other republics. The development of the peonage 
system has deprived them of even the small measure 
of economic and political liberty which they once en- 
joyed, and by taking them away from their homes has 



66 THE FIVE REPUBLICS 

almost entirely destroyed their old community life. The 
native municipalities, which exist side by side with the 
ladino municipal boards in many of the towns, and which 
formerly managed the internal affairs of the native com- 
munity, have been powerless to protect the members of 
the latter from the operations of the habilitadores and 
the tyranny of the representatives of the central gov- 
ernment. Many of the Indian villages which once 
enjoyed a sort of independence of their white neighbors 
are now completely at the mercy of brutal local officials, 
who are not content to exact money from the people 
under them by every conceivable pretext, but even make 
a regular practice of virtually selling into slavery those 
who are intrusted to their government. 

Their own vices, meanwhile, have reduced the native 
race to a pitiable condition in those districts where they 
have longest been in contact with civilization. The cheap 
and poisonous aguardiente, the sale of which is encour- 
aged by the government because of the revenue which 
it produces, is consumed in great quantities by the 
laboring classes, and there are drinking places every- 
where, not only in the towns and villages, but even 
along the country roads. The liquor is much inferior 
to that produced in the other Central American coun- 
tries, and is sold at a price equivalent to less than ten 
cents a quart. Its effects are appalling. To it are due 
the greater part of the crimes committed in the country, 
for drunkenness makes the usually peaceable Indians 
quarrelsome and unruly, and causes Sundays and holi- 
days to be marked everywhere by a great number of 
murders and robberies. There is a very evident de- 
generation, due to this one vice, among the Indians in 
the southern part of the country. 

The coffee plantations, which have within fifty years 
become the most important enterprises in the country, 
are for the most part situated on the southern slopes of 
the volcanoes along the Pacific Coast, not far from the 



OF CENTRAL AMERICA 67 

populous towns and villages of the interior plateau. 
They are on the average larger than in the other coun- 
tries of the Isthmus, and as a rule have their own 
cleaning mills. The coffee of Guatemala is the best 
in Central America, with the possible exception of that 
of Costa Rica, and is hardly excelled in any part of 
the world. The largest and best plantations are owned 
and managed by Germans, who either set them out in 
the first place or acquired them from their former 
native owners; and many of those which still belong 
to citizens of Guatemala are for all practical purposes 
under the control of foreign concerns which hold mort- 
gages on them. Not only production, but also market- 
ing, which is mainly in the hands of German export 
firms, have been highly systematized. 

The production of coffee overshadows all other agri- 
cultural enterprises on the South Coast, but there are 
nevertheless many other crops which deserve to be men- 
tioned because of their local importance. In the plateau 
above the coffee plantations, not only the typical Central 
American foods, like corn and beans, but also many 
temperate zone fruits and vegetables, and even wheat, 
are cultivated successfully. On the coastal plain to the 
South, there are large cattle ranches and cane planta- 
tions, which, in part at least, supply the home demand 
for meat, sugar, and aguardiente. Sheep in the high- 
lands, and cotton in the lowlands, supply the raw ma- 
terial for the clothes still woven by the Indians on hand 
looms in their huts. There is a regular exchange of 
foodstuffs, carried for the most part on the backs of 
men, between the settlements in the plateau and the 
more tropical districts of the coast plain. The traveler 
cannot fail to be impressed with the great variety of 
products which differences in the altitude and in the 
distribution of rainfall make possible, for in the markets 
of the capital one can see almost every kind of temperate 
and tropical zone fruits and vegetables, brought from 



68 THE FIVE REPUBLICS 

one point or another of the steep slope between the 
plateau and the coast. Little attempt has been made, 
however, to cultivate for export any of the valuable 
native plants, with the exception of coffee, or even, in 
the case of some of them, to raise enough to supply 
the local demand. Flour, for instance, is brought from 
the United States in large amounts, although there is no 
apparent reason why a quantity of wheat sufficient to 
supply the whole country should not be harvested on 
the plateaus west of the capital. Cotton also flourishes, 
but most of the cloth used is imported or is manufactured 
in the country from imported yarn. As in the other 
countries of the Isthmus, the production of the one great 
export has consumed the capital and energies of the 
inhabitants of the Republic to such an extent that other 
forms of agriculture have been seriously neglected. 

The economic development of the southern part of 
the country has been greatly accelerated in recent years 
by the improvement in means of transportation. The 
Northern Railway, which connects the capital and the 
South Coast with Puerto Barrios on the Caribbean Sea, 
was completed in 1908 after great expense and many 
difficulties. Another road runs from Guatemala City to 
the Pacific ports of San Jose, Champerico, and Ocos, 
crossing the southern part of the country to the Mexican 
frontier, where it is separated by only a few hundred 
yards from the Pan American Railway of that Republic. 
With the exception of the capital, however, most of the 
important towns still depend upon more primitive forms 
of transportation, as they are situated in the high 
plateaus, several miles above the railway line which runs 
along the South Coast. The same is true of the ma- 
jority of the coffee plantations. The highways which 
connect the towns and fincas with the stations and with 
each other are chiefly mule paths, although there are 
cart roads, and even in some cases carriage and auto- 
mobile roads, between the largest cities. 



OF CENTRAL AMERICA 6» 

The railway system is under the control of an Ameri- 
can-owned corporation which is closely alhed to the 
United Fruit Company. The freight rates are high 
and very inequitable, as they have been arranged with 
a view to giving Puerto Barrios, which is served by the 
Fruit Company steamers, every possible advantage over 
the Pacific Coast ports, through which a large part of 
the foreign commerce of the country is still carried 
on. According to the schedule in force in the fall of 
1915, for example, the company charged $0.70 gold' to 
haul a bag of coffee from the station of Candelaria to 
Barrios, a distance of 331 miles; $1.48 from Guatemala 
City to Barrios, or 196 miles; and $0.64 from Los 
Amates to Barrios, which is sixty miles. To the Pacific 
ports, on the other hand, the rates were proportionately 
much higher, for that from Candelaria to Champerico, 
twenty-two miles away, was $0.22, and that for the 
seventy-five mile haul from Guatemala to San Jose 
was $1.00. 

The policy of the railway company has to a great 
extent counteracted the benefits which the Repubhc might 
have received from the opening of the Panama Canal, 
because it has discouraged the shipping of imports and ex- 
ports by way of the Pacific Coast. The western depart- 
ments have profited somewhat by receiving lower rates to 
Barrios, but it still costs them more to send their coffee 
by that route than if they had a fair rate to the southern 
ports. In other parts of the country, the railroad is 
forced to charge higher rates than would otherwise be 
necessary, in order to maintain its total revenues. The 
loss to the country as a whole from having its com- 
merce deflected to a more expensive route than that 
which it would otherwise have taken is considerable. 
Although the Pacific Coast ports are mere open road- 
steads, where the irregular steamship service cannot be 

^ When the expression " gold " is used in regard to sums of money. 
United States currency is meant. 



70 THE FIVE REPUBLICS 

compared with that provided by the Fruit Company 
at the safe harbor of Puerto Barrios, they are never- 
theless the logical outlet for the commerce of the more 
populous part of Guatemala, because they are so much 
nearer to the coffee plantations. The difference in the 
ocean freights from Barrios to "New York and from the 
Pacific ports via Tehuantepec or Panama to New York 
— between forty and fifty cents on each one-hundred 
pound bag of coffee — is not in reality enough to offset 
the actual cost of the long railroad haul across the 
mountains. 

Although it is on the South Coast that the great ma- 
jority of the people of Guatemala live, there are several 
other districts of economic importance. The exploitation 
of the natural resources of these has been left almost 
entirely to foreigners. Beyond the arid and unproduc- 
tive interior districts immediately north of the volcanic 
region, there is another coffee belt in the Department 
of Alta Verapaz, the product of which, known to the 
trade by the name of the departmental capital, " Cohan," 
is of an unusually fine quality. The owners of the 
plantations are for the most part Germans. The coffee, 
which amounts to about ten per cent of the total ex- 
ported from the Republic, is shipped from the port of 
Livingston, with which the plantations are connected by 
a short railway and a regular hne of launches on Lake 
Izabal and the Rio Dulce. East of the Alta Verapaz, 
along the lower part of the railway line from the capital 
to Puerto Barrios, the United Fruit Company has 
estabhshed a number of banana plantations. These 
are not so extensive as those of Costa Rica or Hon- 
duras, but they furnish a continually increasing export, 
which is now second in value only to that of coffee. The 
low, unhealthful plain of Peten in the North, which 
comprises almost a third of the area of the Republic, is 
rich in mahogany, Spanish cedar, and other valuable 
trees, but the lack of means of transportation and the 



OF CENTRAL AMERICA 71 

deadly climate have so far prevented the increase of 
the population there and have discouraged the develop- 
ment of the natural resources. 

Guatemala has been gifted by nature with a delight- 
ful and healthful climate and a marvelously fertile soil 
which ought to make her one of the richest countries in 
tropical America. She can never attain real prosperity, 
however, until her rulers make a determined effort to 
improve the situation of the masses of the people by 
doing away with the worst features of her social organi- 
zation. Among the lower classes, the contract labor sys- 
tem and the unrestricted sale of aguardiente are today 
causing a steady degeneration, which eventually, if not 
checked, will cause the community as a whole to sink 
farther and farther into a condition of semi-barbarism. 
These evils will be very difficult to remedy. Legislative 
action to secure the independence of the Indians will 
be obstructed by the interest which the ruling classes 
have in the status quo, and the education of the laborers 
to a point where they will be able to protect their own 
interests will be a matter of generations and perhaps 
of centuries. Upon a gradual raising of the social and 
economic status of the aborigines, however, rather than 
upon the development of agriculture and the exploita- 
tion of the natural resources of the coimtry, the future 
of Guatemala depends. 



CHAPTER IV 
NICARAGUA 

Points of Resemblance Between Nicaragua, Salvador, and Honduras — 
Peculiar Geographical Situation of Nicaragua — Factors Which Have Caused 
Disorder There — Rivalry Between Leon and Granada — History of the Republic 
— Economic Conditions — Means of Transportation — Relations with the United 
States. 

Nicaragua^ Salvador, and Honduras strongly re- 
semble one another in many of their characteristics. 
They differ from the two other republics of the Isthmus 
in that there has been more mixture of races among 
their people than in those countries. The Indians did 
not remain a distinct ethnic entity, as in Guatemala, 
and were not exterminated, as in Costa Rica, but fused 
with the invaders into a fairly homogeneous half-breed 
population which adopted the language and religion of 
the Spaniards but in most places retained the Indian 
ways of living and cultivating the soil. The upper 
classes, especially in Nicaragua and Salvador, are for 
the most part of European ancestry, and the laboring 
population, although there is but a small part of it 
which does not also show an admixture of Spanish blood, 
is distinctly Indian in features and customs; but only 
in a few places is there a sharp line between either of 
these classes and the half-breed, or mestizo^ element, 
which is perhaps the most numerous of the three. Social 
distinctions seem to some extent to coincide with, but 
they can hardly be said to depend upon, racial lines. 

There is thus more homogeneity in the population and 
less inequahty between the classes than there is in 
Guatemala. Although the greater part of the people 
are laborers on the plantations of the aristocracy which 
owns all of the best agricultural properties, they are 

72 



REPUBLICS OF CENTRAL AMERICA 73 

free laborers, who receive fair wages and are not com- 
pelled to work unless they wish to. There is, further- 
more, a somewhat wider distribution of land than in 
the northern Republic, and the rights of the small farmer 
are better protected than are those of the Guatemalan 
Indian. 

The government, although in no sense democratic, is 
nevertheless dependent to some extent upon public 
opinion, for the lower classes are all too prone to revolt 
and overthrow a president with whom they are dis- 
, contented. The political parties are led and directed by 
a wealthy and educated minority, but their sanguinary 
contests with one another are usually decided by the 
support of the common people, and especially of the 
people of the cities. Several causes lead artisans and 
laborers who otherwise have no interest in politics to 
take part in these civil wars. One of the most important 
is the rivalry between different towns and villages, the 
spirit of localismo, and another, which, however, is 
rapidly becoming less prominent, is the traditional di- 
vision, based on no real opposition in principles or 
policy, into " Conservatives " and *' Liberals." Still a 
third is the disposition to be " against the government," 
whatever its merits — a disposition which is by no means 
peculiar to the Hispano-Indian race. It is upon these 
factors that the political parties are built up. Each 
chief endeavors to secure a following among the artisans 
and laborers of his district by cultivating friendly per- 
sonal relations with them and by playing on their 
prejudices, and to carry his followers with him in what- 
ever hne of action best suits his personal interests. The 
groups thus formed consequently represent petty preju- 
dices and loyalty to individuals rather Jhan pohtical 
principles. 

The presidents of these countries are therefore less 
absolute rulers than the chief executive of Guatemala 
usually is. Instead of an easily controlled army of 



74 THE FIVE REPUBLICS 

ignorant Indians, who have httle disposition to do any- 
thing but obey the commands of their officers, the 
government must depend on soldiers who, to some extent 
at any rate, think for themselves and take an interest 
in political affairs. It must not only retain the good 
will of its followers, but it must refrain from arousing 
hostility in the community at large, where the opposi- 
tion is usually too numerous and too well-organized to 
be rendered harmless by killing or exiling its leaders 
and repressing its agitation. There is no public opinion 
sufficiently strong to prevent the party in power from 
dealing severely with its most conspicuous enemies, or 
from misusing its control of the machinery of the ad- 
ministration for the benefit of the officials and their 
friends, but there is at least an ever-present danger of 
revolution to make it cautious about alienating the sym- 
pathies of too large a proportion of the people at 
large. 

Republican institutions cannot be said to flourish in 
any of the central republics, but there is a far more 
hopeful prospect of their eventually becoming a reality 
there than in Guatemala. It would be impossible, 
among the factious half-breeds of the Nicaraguan towns, 
to round up all classes of the population by military 
action and lead them to the polls to vote for the presi- 
dent, as was done when President Estrada Cabrera 
was unanimously re-elected in 1916, but it is not very 
difficult to control the election by other means. Under 
ordinary circumstances, there is no chance for any but 
the official ticket. The opponents of the government, 
and even those who are suspected of being lukewarm 
in their support of it, are excluded from the official 
lists of voters, with or without a perfunctory excuse, 
and opposition candidacies are discouraged by the im- 
prisonment or the expulsion from the country of the 
rival leaders and of their chief supporters. Fraud and 
intimidation are generously employed to increase the 



OF CENTRAL AMERICA 75 

government's majority. The measures taken are usually 
sufficient to secure a result satisfactory to the faction 
in power, but occasionally they are unavailing because 
the opposition is strong enough to wring a compromise 
from the administration or to overthrow it by revolution. 
Elections, therefore, are often accompanied by more or 
less disorder and uncertainty, and a too violent attempt 
to impose an unpopular candidate on the people has 
not infrequently been followed by civil war. With the 
spread of popular education at the present time, there 
are grounds for hoping that elections will in the not 
very distant future become more nearly a real expression 
of the will of the people — a character which they have 
already assumed in Costa Rica. 

The pohtical and economic development of Nicaragua 
has been determined by forces similar to, but more 
marked than, those which have affected Salvador and 
Honduras, and a study of her history and institutions 
will therefore make it easier to understand the situation 
of the other two republics. 

Nicaragua has always been an object of interest to 
the outside world because of her geographical situation. 
In her territory, the Central American Cordillera is 
broken by a depression which extends across the 
Isthmus, forming the basin of the two great lakes and 
of the San Juan River, their outlet to the Atlantic. 
Lake Nicaragua, which is only IIQ feet higher than 
the ocean, is separated from the Pacific by a range of 
small hills, the lowest passes of which are said to be 
but twenty-five or twenty-six feet above its surface and 
thus only 135 above that of the sea.^ At the narrowest 
place this strip of land is less than thirteen miles wide. 
North of Lake Nicaragua, and connected with it by a 
small river, is Lake Managua, between which and the 
Pacific there is a distance of about thirty miles across 
the low plain of Leon. In colonial times, the route 

^ Elis6e Reclus, North America, Vol. II, pp. 274, 279. 



76 THE FIVE REPUBLICS 

across the Isthmus through Leon to Granada on Lake 
Nicaragua, and from thence by water, was commonly 
used for the transportation of products from all parts 
of Central America to Spain; and much more recently 
it was one of the most popular ways of reaching Cali- 
fornia from the East Coast of the United States. It 
early attracted the attention of those who were interested 
in transisthmian canal projects, and came to be con- 
sidered by many as the most practicable route for an 
interoceanic waterway. Diplomatic controversies for 
the control of the proposed canal, and the machinations 
of corporations desiring to secure concessions for its 
construction, which it would be impossible even to sketch 
here, have played a large part in the international rela- 
tions of the Republic, and at times have not been without 
effect on her internal political conditions. 

The people of Nicaragua, more than those of any of 
the other countries of the Isthmus, are dwellers in cities. 
About a fourth of all her inhabitants live in six important 
towns in the lake plains.^ The Spaniards established 
their principal settlements in this region at the time of 
the conquest, in spite of the hot climate, in order the 
more easily to hold in subjection and to utilize the 
labor of the large Indian communities which had long 
since grown up there because of the fertihty of the soil 
and the plentiful water supply. The concentration of 
the population in a few centers has intensified all of 
the conditions which have worked against peace in 
Central America, and has made Nicaragua the most 
turbulent of the five repubhcs. The inhabitants of 
cities, since the beginning of history, have been more 
inchned to disorder and revolt than their brothers in 

^ There are no very reliable figures for the population of the cities or 
for the total population of the Republic, but the best estimates agree that 
the Republic has about 600,000 inhabitants, while the population of the 
cities mentioned may be stated approximately as follows: Leon, 62,000; 
Managua, 35,000; Granada, 17,000; Chinandega, 10,000; Masaya, 13,000; 
Rivas, 8,000. 



OF CENTRAL AMERICA 77 

the country, and this is especially true in Central 
America, because both personalismo and localismo, with 
all their attendant evils, reach their most complete 
development in large communities, where the contact 
between individuals is closer and the number of persons 
interested in politics is greater than in rural districts. 
The mestizo artisans, who are relatively more numerous 
and more influential in Nicaragua than anywhere else 
in the Isthmus, are always ready to drop their work 
and take up arms in the interests of their faction or of 
their patron, and even the ordinary laborers, in the 
towns at least, are Liberals or Conservatives, and fol- 
lowers of this or that chief. The common people are 
but little interested in the principles involved in the 
contests between the two great traditional political 
parties, but they follow their leaders partly from per- 
sonal devotion and partly because they are united to 
them by the old local hatreds which have kept these 
parties ahve in Nicaragua after they have become little 
more than names in other parts of the Isthmus. 

This rivalry between different towns has caused blood- 
shed at one time or another in each of the Central 
American republics, but in all except Nicaragua it has 
to a great extent died out at the present time, because 
the capitals have become more important than any 
of their rivals, and have drawn to themselves many of 
the wealthier and more influential provincial families. 
In Nicaragua, neither of the two cities established by 
the Spaniards at the beginning of the sixteenth century 
has been able to establish its supremacy, and the history 
of the country from the very beginning has been one 
long struggle, made more bitter by radical differences 
in the ideals and interests of their people, for the control 
of the government and the direction of the affairs of the 
nation. 

Granada, at the western end of the Great Lake, has 
always been primarily a commercial center, since the 



78 THE FIVE REPUBLICS 

days when it was the chief port for the trade between 
Central America and Spain by way of the San Juan 
River. Her leading citizens are not only landed pro- 
prietors, but merchants, who sell goods in person over 
the counters of their stores. Her great families form 
a coherent and powerful group, which has always been 
able, because of its wealth and social prestige, to exert 
an influence far out of proportion to its numbers, not 
only in its own city but in the country at large. The 
greater part of the fifteen or twenty thousand other 
inhabitants depend upon them as servants or employees, 
for the artisan class is small and relatively unimportant. 
There are few professional men of social prominence and 
few small landholders, for the rural districts roundabout 
are mostly given over to large, carelessly managed cattle 
ranches. The Chamorros, Lacayos, and Cuadras, with 
their relatives, have always considered themselves a sort 
of Creole aristocracy, and even in colonial times they 
were restive under the control of the Spanish authorities 
at Leon. After the declaration of independence, they 
naturally joined the great families of Guatemala in 
the Conservative party, and they have since retained the 
name, if not the principles, of that organization. 

The Liberal party, on the other hand, has its center 
in Leon, the capital of the province in colonial times, 
and today, with sixty or seventy thousand inhabitants, 
the largest city of the Republic. There, the domination 
of pohtical and social affairs until 1821 by officials sent 
over from Spain prevented the rise of a strong Creole 
aristocracy, and the constant infusion of Spanish blood 
during colonial times, as well as the presence of many 
Peninsular Spaniards even after the declaration of in- 
dependence, somewhat retarded the changes wrought 
in the white stock in other places by nearly four cen- 
turies of life in the torrid climate of the lake plains. 
The people of Leon have always shown an inclination 
towards intellectual and professional pursuits which is 



OF CENTRAL AMERICA 79 

noticeably absent in Granada, and take great pride in 
their schools and their university. The most prominent 
lawyers and physicians of the Republic, even in Managua 
and the other cities, are for the most part JLeoneses, just 
as the majority of the leading native merchants are 
related to the Granada families. Leon has a large and 
aggressive body of artisans and many small landholders, 
for the wide plain around the city is divided into a large 
number of little properties, worked either by the owner 
in person or under his immediate supervision. There 
are few families of great wealth. It was inevitable that 
such a community should take the side of the Liberals 
in the struggles which marked the early years of the 
Central American federation, for the character of its 
population made it radical just as the position of the 
great families of Granada made them conservative. 

The other towns of the Republic, none of which until 
within recent years could compare in wealth or popula- 
tion with either of the two chief cities, are divided 
between these in their sympathies. Those which are 
dependent geographically upon one of the rivals have 
naturally followed it in politics. Others are split within 
themselves by feuds between their leading citizens and 
between different elements in their population. Since 
the development of the coffee industry has caused a 
great increase in the importance of Managua, Mata- 
galpa, and some of the other towns, these places have 
of course acquired much pohtical influence, but the 
various groups among their people have rather allied 
themselves to the already existing factions than formed 
new ones of their own. The Conservative and Liberal 
leaders in Granada and Leon still dominate the party 
councils, although their authority is sometimes questioned 
by their allies in the newer centers. 

The jealousy between Granada and Leon found 
expression in armed conflict as soon as the authority 
of the mother country was removed. After the declara- 



80 THE FIVE REPUBLICS 

tion of independence, the Spanish governor in Leon, 
hke the authorities in many of the other provinces, 
refused to recognize the authority of Gainza, while 
the Granadinos joyfully accepted the new central gov- 
ernment in Guatemala in preference to that of the 
mother country. As the result of this situation, an 
intermittent war began which lasted until General 
Morazan, on becoming president of the Federation, 
sent Dionisio de Herrera, as jefe de estado, to restore 
order. Under him the Liberal party was firmly in- 
trenched in power. He was succeeded by a series of 
jefes of the same faction, most of them under the control 
of a military leader named Casto Fonseca, who was 
comandante de armas. The destruction of the Liberal 
governments in the other republics, however, made the 
position of the authorities in Nicaragua precarious; and 
in 1845 their administration was overthrown by a Con- 
servative uprising aided by armies from Honduras and 
Salvador, which wished to punish Leon for the asylum 
afforded there to the defeated followers of Morazan. 
After sacking the capital and slaughtering a large part 
of its inhabitants, the invaders moved the capital to 
Masaya and later to Managua, both small towns near 
Granada. A Conservative government, made up of the 
great families of the latter city, endeavored to establish 
order and repair the damage wrought by the civil wars 
which had continued almost without interruption ever 
since the federal government had grown too weak to 
maintain peace, but their efforts were of little avail. 
The new comandante de armas, Trinidad Munoz, kept 
the country in a state of continual disturbance, by in- 
trigue and conspiracy, in order to increase his own 
influence, and finally betrayed the party which had 
placed him in office and used the force intrusted to 
him to bring about the re-establishment of the capital 
at Leon. A new Conservative uprising aided by Hon- 
duras and Costa Rica overthrew him in 1851, and the 



OF CENTRAL AMERICA 81 

seat of the government was again transferred to Man- 
agua. The Conservatives made a sincere effort to 
estabhsh harmony between the two parties, but after 
their attempts to conciliate their opponents by giving 
them a place in the cabinet had proved a failure, they 
endeavored equally unsuccessfully to maintain order by 
severe measures which only made the Liberals the more 
bitter. 

In 1854, the people of Leon, under the lead of Maximo 
Jerez and Francisco Castellon, drove the forces of the 
government out of their city and attacked Granada. The 
Conservatives, who received timely aid from Guatemala, 
resisted determinedly. By the end of the year they were 
apparently gaining the upper hand, when the Liberals, 
in their attempts to turn the tide, called in the support 
of a band of North American filibusters. This was the 
origin of the " National War," one of the most re- 
markable and most romantic events in the history of the 
Isthmus. 

On June 16, 1855, William Walker landed at the 
port of Realejo, with fifty-seven other adventurers, 
ostensibly for the purpose of aiding the Liberal govern- 
ment at Leon, which had invited him to come to Nica- 
ragua, but in reality with the intention of obtaining 
control of the entire country for himself. This he 
succeeded within a few months in doing. Carrying his 
force to San Juan del Sur by sea, he evaded a Con- 
servative army sent to attack him there, sailed up the 
lake to Granada, and on October 13 occupied that city 
with little resistance. The force of the Conservative 
leaders was unimpaired, but they feared to attack the 
foreigners, who held their families as hostages. Corral, 
the head of the government forces, agreed therefore to 
a treaty of peace, signed on October 23, by which 
Patricio Rivas, a moderate Conservative, became presi- 
dent, Corral himself secretary of war, and Walker com- 
mander of the army. The native troops were for the 



k. 



82 TTTK FIVE KKriTBT.TCS 

most part disbniuled, «iul the lililnisters, or the " Ameri- 
ciiu Phnlanx," as they called Iheiuselves, Avere practically 
tlie only inihtnry force in the Kepnbhc. 

Walker <lesiretl to establish a. coalition government, 
under his own control, in whicli the leaders of both great 
parties shonld be re[)resented. This proved ini[)ossible, 
becanse the native chiefs from tlie ^irst slumed signs 
of disaffection. Corral was discovered to be holding 
treasonable correspi>ndence with the presidents of the 
other Central Anu^ricaii repnblics, and was shot only a 
short time after the signatnrt* oi' the treaty of peace. 
Ifivas, the new president, and Jerez, the leader of the 
Liberals, desertetl AValker in the following .Tune, 
and began a revolntion against liim in Leon and the 
western departments. \V^alker therenpon had him- 
self elected President of the Uepnblic (.Inne 29, 
1856). 

The adventure of the filibusters had meanwhile at- 
tracted much interest and sympathy in the United 
States, where the control of Nicaragua by an xVmerican 
was regardeil as an offset to the encroachments of Great 
Britain on tlie eastern end of the propi>sed route of the 
interoceauic canal. The control exercised by that power 
over Greytown, at the mouth of the San Juan l^iver, 
had not yet been given up, in spite of the provisions 
o( the Clayton- lUilwer Treaty. The people of the South, 
moreover, who favored expansion in trc^pical countries 
in order to maintain the relative influence of the slave 
states in the lhiit>n, believed that they saw in the meas- 
ures which Walker adopted early in his administration 
to aid Americans iti accpiiring land in Nicaragua, and 
to open the wa>' for the introduction there of negro 
slavery, indications that his ultimate object wa^ the 
annexation of the country to the Ignited States as a 
new slave-holding commonwealth. This belief appears 
to have been erroneous, for \Valker hhuself more than 
once expressed the intention of creating an uidependent 



OF CENTRAL AMERICA 83 

nation, with himself at its head as mihtary dictator;' but 
it at least gained for the adventurer a large amount of 
assistance. 

It was therefore easy for Walker's friends to secure 
large amounts of supplies and many recruits for his 
cause in the United States. The original force of fifty- 
eight was soon increased to several hundred, and the 
immense losses caused by disease and by fighting were 
made up with little difficulty. It is said that 2,500 men 
in all joined the " phalanx," of whom more than one 
thousand died of wounds or of disease.'' 'J'he govern- 
ment of the United States attempted to stop the re- 
cruiting of men and the fitting out of expeditions within 
its jurisdiction, but it was able to accomplish very little 
because of the deficiencies of its neutrality laws and the 
strong popular feeling in favor of the filibusters, which 
often prevented the federal officials from carrying out 
the orders of their superiors. The President and the 
Department of State themselves were by no means 
unfriendly to Walker's enterprise while it still offered 
a prospect of success. The American minister in 
Nicaragua had throughout exerted his influence in favor 
of Walker, although in so doing he had greatly ex- 
ceeded his instructions, and the Rivas government had 
been officially recognized by President Pierce on May 
14, 1850. This recognition was not, however, extended 
to Walker after the latter had become president. 

The most useful friends and the most dangerous 
enemies of Walker's regime were the American fi- 
nanciers interested in the Accessory I'ransit Company, 
a concern which was at that time transporting many 
thousands of Americans each month from New York 

' See William O. Scroggfl, Pilihuttem and FinanrAc/rn, which gives a 
very complete account of Walker's career, and upon which the U}ri:ii(i\i\fi^ 
sketch is to a great extent bawd. Walker himself wrote a hook ai^jout 
his campaigns, entitled The War in Nicarayua, and many of his followers 
also left accounts of their adventures. 

*Scrogg8, op. cit. p, '.V)5. 



84 THE FIVE REPUBLICS 

to San Francisco by way of the San Juan River, cross- 
ing from the Great Lake to the Pacific by a macadam- 
ized road from La Virgen to San Juan del Sur. When 
the fihbusters arrived in Nicaragua, a contest was in 
progress in this company in which Morgan and Garrison, 
the agents at New York and San Francisco respectively, 
were striving to wrest the control from Cornelius Van- 
derbilt. Faihng to achieve their purpose, Morgan 
and Garrison determined to make use of Walker to 
turn the tables upon their successful rival. They did 
much to aid him in securing control of the Nicaraguan 
government by supplying him with money and arms and 
by bringing him large numbers of recruits in their 
steamers from New York and San Francisco; and in 
return for these favors they prevailed upon him to 
revoke the concession of the old company and to grant 
a new concession to them. This action brought Walker 
into a conflict with Vanderbilt, who from that time 
on used every means to compass the filibuster's de- 
struction. 

In July, 1856, Walker was practically supreme in 
southwestern Nicaragua, and had complete control of 
the Transit route. An army sent against him by Costa 
Rica a few months before had won two or three battles, 
but had soon been forced to withdraw by an epidemic 
of cholera. The hostile elements in Nicaragua itself, 
and the armies of Guatemala, Salvador, and Honduras, 
were however gathering at Leon, for all Central America 
had risen in arms against the foreign invader. In Sep- 
tember the allies advanced on Masaya, where they 
inflicted a heavy defeat on a small force of Americans. 
In November they took Granada, the seat of Walker's 
government, which the filibusters evacuated and de- 
stroyed on their approach. Walker then moved his 
army by water to the Transit road, which was the 
chief avenue by which he received supplies and recruits 
from the outside world. 



OF CENTRAL AMERICA 85 

The allies had thus far been unable to inflict a 
decisive defeat on the American leader. Although they 
had faced him for five months with forces which must 
have outnumbered his little command at least three to 
one, the quarrels between their leaders had made ef- 
fective action impossible, and the diseases which had 
decimated both camps had disheartened them far more 
than they had the intrepid " phalanx." It is probable 
that they would soon have abandoned the campaign had 
not Costa Rica, instigated by Vanderbilt and encour- 
aged by the government of Great Britain, again taken 
the field and struck Walker a decisive blow at his 
weakest point. In December a force from that country, 
directed by one of Vanderbilt's agents, had descended 
the San Carlos River and seized the steamers on the 
San Juan and the Great Lake, thus cutting off Walker's 
communications with New York, whence he had received 
the greatest part of his reinforcements. They then 
joined the allies who were confronting the filibuster 
force at Rivas. Walker was now no longer able to re- 
plenish his supplies or to fill the gaps in his ranks with 
new recruits. Although in desperate straits, he held out 
for several months, beating of£ the attacks of the Central 
American troops with great loss. The melting away 
of his small force through disease and desertion, how- 
ever, finally made his position untenable. On May 1, 
1857, he surrendered to Commander Davis of the U. 
S. S. St. Mary's, who had interposed his mediation to 
put an end to the hostilities. 

At the conclusion of the war there were six armies 
in Nicaragua, representing the four other Central 
American republics and the two factions in the country 
itself. Most of the foreign contingents were withdrawn 
by their respective governments, after some sHght dif- 
ficulties, but neither the Conservatives under General 
Tomas Martinez nor the Liberals under Jerez were 
wilhng to allow the other party to take possession of 



86 THE FIVE REPUBLICS 

the government. Another civil war would probably 
have been the result, had not the Republic suddenly- 
been menaced by a new danger from without. Costa 
Rica, attempting to take advantage of the exhaustion 
of her neighbor, declined to evacuate the territory which 
she had occupied on the south bank of the San Juan 
River, and demanded the surrender of certain military 
posts there which would give her control of the greater 
part of the route of the proposed canal. As soon as 
the intentions of President Mora became evident, Jerez 
and Martinez assumed a joint dictatorship and pre- 
pared for war. Hostilities were only averted by the 
sudden return of Walker, which forced the two coun- 
tries to settle their differences and to prepare to resist 
a new invasion. Costa Rica had already withdrawn 
her claims when news arrived that the filibuster had 
been taken prisoner by the captain of an American 
warship on the East Coast before he had had time to 
reach the interior^^ 

Meanwhile the capital had been definitely and per- 
manently established at Managua, and Tomas Martinez 
had taken charge of the presidency as the result of an 
election. With his accession began the first, and up to 
the present time the only, era of relatively stable and 
comparatively efficient government in the history of the 
Republic. Martinez held office until 1867, suppressing 
a Liberal revolt led by Jerez in 1863, and was succeeded 
by a series of capable and honorable presidents belong- 
ing to the Conservative party .^ These men were the 
leaders of a strongly organized and homogeneous group, 
which was able to maintain itself in office until 1893 
because of its unity and its moderate and sagacious 

^ Walker was eventually captured and shot while attempting a third 
invasion of Central America on the North Coast of Honduras in 1860. 

" These were : Fernando Guzmdn, 1867-71 ; Vicente Cuadra, 1871-75 ; 
Pedro Joaquin Chamorro, 1875-79; Joaquin Zavala, 1879-83; Addn Cdr- 
denas, 1883-87; Evaristo Carazo, 1887-89; David Osorno, 1889; and Roberto 
Sacajsa, 1889-93. 



OF CENTRAL AMERICA 87 

policy. Although thoroughly conservative in ideas as 
well as in name, striving to maintain the existing social 
order and the influence of the Church, the administra- 
tions of the " thirty years " nevertheless did much to 
promote the economic and social progress of the country. 
A railway was built from the Pacific port of Corinto 
to Leon and Lake Managua, and another from the 
city of Managua to Granada; agriculture was encour- 
aged in many ways; and even the school system was 
enlarged and improved. Their most important achieve- 
ment was the maintenance of peace during so long a 
period. There were few revolts of importance, and 
not one successful revolution between 1863 and 1893, 
notwithstanding the fact that the prolonged tenure of 
power by one political group, which allowed no real 
freedom of elections, was naturally distasteful to the 
opposition. 

The methods by which the Conservatives were able 
to sustain their authority for so long should afford a 
valuable lesson for their successors. In the first place, 
the government was that of a group of men, rather 
than that of one absolute ruler. As each president at 
the end of his term turned over his office to one of his 
associates, instead of bringing about his own re-election, 
there was little jealousy between the leaders, and each 
in turn had the support of a united party. So long 
as there was no treachery within the administration itself, 
and so long as friendly relations were cultivated with 
the neighboring states, the government, with its control 
of the army and the forts, had little to fear from its 
enemies. The Liberals, on their side, showed little 
inclination to recommence the civil wars which had 
devastated the country from 1821 to 1863, for they 
profited by the maintenance of order, and were treated 
with far more fairness and generosity than usually falls 
to the lot of the opposition party in Central America. 
At the present time, after a quarter century of renewed 



88 THE FIVE REPUBLICS 

party strife and mutual persecution, many members of 
both parties look back on the " thirty years " as the 
happiest period of the Republic's history. 

There were, however, dissatisfied elements which only 
awaited an opportunity to overthrow the Conservative 
regime. The Leon leaders were far from accepting 
the rule of their traditional rivals complacently, and 
they could rely upon the support of increasingly numer- 
ous groups of young men of the middle and lower classes 
in other parts of the country, who were beginning to 
take a prominent part in political agitation. The 
" Principal Famihes " were losing their prestige as they 
had already lost it in Guatemala and Costa Rica, and 
their political power was destroyed when the first serious 
dissension appeared in their ranks. In 1889 President 
Carazo died in the middle of his term, and was suc- 
ceeded by Roberto Sacasa, one of the few Conservatives 
from Leon. When the new president attempted to 
give the people of his own city some of the more im- 
portant public offices, the extreme partisans of Granada 
overthrew him in 1893. This act, which broke the unity 
of the Conservative party and thus weakened the govern- 
ment, was followed by a successful Liberal uprising in 
Leon some months later. 

As the result of this revolution, the presidency was 
given to a young man from Managua, who was promi- 
nent among the younger generation of Liberals. Jose 
Santos Zelaya was the absolute ruler of Nicaragua for 
sixteen years. He was supported at first by the leaders 
at Leon, but in 1896, when it became evident that he 
intended to force his re-election for a second term, the 
western city rose against him. The administration was 
saved only by the intervention of the allied government 
of Honduras and by the aid of the Conservatives of 
Granada, who were willing to support even a Liberal 
president against their traditional enemies. This episode 
illustrates one of the chief sources of Zelaya's power — 



OF CENTRAL AMERICA 89 

his skill in playing off the memhers of the different 
factions against one another. When it became evident 
that it was impossible to overthrow him, the Leon chiefs 
again associated themselves with him, and even some 
of the wealthy Granadinos accepted positions and favors 
from him. 

During the Liberal administration, the railway system 
and the steamer service on the lakes were extended and 
improved, the development of the coffee districts was 
stimulated by generous subsidies, and the capital, 
Zelaya's birthplace, was transformed from a rather 
primitive small town to the most progressive city of 
the Repubhc, which at the present time is ahead of 
Granada, and but little behind Leon, in population. 
Marked progress was made in the matter of public 
instruction, for schools were opened in all parts of the 
country, and many young men of special abihty were 
sent abroad to study. It is to be regretted that the 
Conservative administrations which succeeded Zelaya 
have fallen far behind the Liberal dictator in this respect, 
and have abandoned many of the educational institutions 
which he opened. 

Despite his progressive pohcy, however, Zelaya was 
a brutal and unscrupulous tyrant, who exploited the 
country for his own personal profit on a scale unprece- 
dented in the history of the Isthmus. He and his 
ministers established monopohes of all sorts, and sold 
valuable concessions to foreigners or acquired them 
themselves, until there were few forms of agriculture 
or industry which did not pay a heavy tribute to some 
favored person. The silver currency disappeared before 
large issues of irredeemable paper money, and the 
requisitions of the government were paid for, not with 
cash, but with receipts which could be negotiated only 
at a loss and through the aid of persons having influence 
with the treasury department. Private persons enjoyed 
little protection in their property and personal liberty 



90 THE FIVE REPUBLICS 

against abuses of power by the local and military 
officials, and the enemies of the government suffered not 
only exile and the confiscation of their property, but even 
torture and sometimes death in the prisons. The rich 
families of Granada, who were with some reason held 
responsible for the revolts which occurred almost every 
year, were treated with great brutality. The avarice 
and cruelty of the men in power, however, were felt 
most severely only by their irreconcilable enemies. The 
friends of the government prospered, and the people as 
a whole suffered comparatively little. In the country 
at large, in fact, the inflow of money resulting from the 
reckless sale of concessions created a sort of prosperity, 
for which the country has had to pay since Zelaya's fall. 

Zelaya raised Nicaragua to a position of influence in 
Central America which she had never before enjoyed. 
He fomented revolutions in all of the other four repub- 
lics, and even in countries so far distant as Colombia 
and Ecuador, until by 1909 the only one of his neighbors 
who did not hate and fear him was the president of 
Honduras, whom he himself had placed in office by his 
invasion of that state in 1907. During the last three 
years of his administration, his attempts to re-establish 
the old federal union, with himself at its head, plunged 
all Central America into turmoil. His warlike activi- 
ties and his systematic opposition to American influence 
in the Isthmus finally brought about an open rupture 
with the government of the United States, and did 
much to cause his downfall. The history of the revolu- 
tion of 1909, and the history of the Republic since that 
date will be treated in Chapter XI. 

Ninety-five years of rarely interrupted civil strife 
have left Nicaragua in a condition which offers little 
hope for the early re-establishment of peace and good 
government. The advances made along these lines 
between 1863 and 1893 were to a great extent nullified 
during the Liberal regime, when the continual attempts 



OF CENTRAL AMERICA 91 

at revolution, followed usually by barbarous treatment 
of the people of Granada and other Conservative centers, 
not only revived and intensified the old localistic spirit, 
but aroused a turbulent spirit and a strong taste for 
factional strife among the people of all classes. Within 
a few years after 1893, it would have been impossible 
for either party to acquiesce in the rule of the other as 
the Liberals had acquiesced in the Conservative regime 
of the " thirty years,'* for the subordination of any sense 
of justice to political considerations in the conduct of the 
government and in the courts made the opponents of 
the party in power so insecure in their property and in 
their personal liberty that they were ready to support 
almost any revolutionary movement which promised an 
alleviation of their condition. The only creed of public 
officials and professional politicians seemed to be the 
promotion of the interests of their faction and the abuse 
and subjugation of their political enemies. These con- 
ditions were little changed by the advent of the Con- 
servatives to power in 1910, because the new authorities, 
who had grown up under the oppression of Zelaya, 
with the worst features of his administration constantly 
before their eyes, apparently could not resist the tempta- 
tion to avenge themselves upon their former rulers on 
the one hand and to attempt to recoup their losses at 
the expense of the nation on the other. The political 
morality of all parties had been so debased that a 
restoration of the clean and moderate regime of the 
" thirty years," of which many of the older generation 
in Granada had dreamed, was no longer possible. 

The fertile lake plains, laid waste time after time by 
revolutionary armies, are no longer the " Mahomet's 
Paradise " which travelers had described in glowing 
terms in colonial times. After the declaration of inde- 
pendence, the energies of the ruling class in each section 
of the country were entirely occupied in endeavors 
to maintain themselves in power or to overthrow ad- 



92 THE FIVE REPUBLICS 

ministrations controlled by their enemies. The harassed 
landholders continued to cultivate their plantations as 
well as they could in the intervals between civil wars, 
but the political situation of the country soon became 
so hopeless that there was little incentive for them to 
attempt to repair the damage wrought by each successive 
outbreak or to engage in new agricultural enterprises. 
The indigo plantations which had made the people of 
the province wealthy under the rule of Spain were 
abandoned some time before the invention of aniline 
dyes made them unprofitable in the other states, and 
the famous cacao of Nicaragua, which was formerly an 
important export, is now grown in quantities little more 
than sufficient to supply the local demand. The only 
important products of the lake basin today are plantains, 
corn, beans, sugar, and cacao, which are planted for 
local consumption, and cattle, which are still raised in 
large numbers, notwithstanding the losses inflicted on 
ranch owners by foraging parties and bandits. 

Outside of the hot plains of the interior, there have 
until recently been few settlements of importance. The 
climate of the mountains to the northwest and southeast 
of the lakes is much more suitable to European coloniza- 
tion than that of Granada and Leon, but the latter cities, 
situated as they are on what was formerly the trans- 
isthmian commercial route, have always been preferred 
as a place of residence by the Creole famihes. The 
majority of the towns which were established in the 
sixteenth and seventeenth centuries in the regions of 
Matagalpa, Jinotega, and Segovia were soon destroyed 
by the fierce mountain Indians or by pirates who came 
up the rivers from their bases of operations on the 
East Coast; and those which survived, with few excep- 
tions, are today but little more than stragghng villages. 
In the sierras between the lakes and the Pacific, there 
were at the time of the conquest a number of Indian 
Tillages, but their growth was discouraged by the fact 



vM 



OF CENTRAL AMERICA 93 

that the lack of rivers and springs made it difficult to 
secure even drinking water in the dry season. Neither 
district received much attention from the government 
until the latter part of the nineteenth century. 

During the last twenty-five years, however, a number 
of coifee plantations have been estabhshed both in the 
departments of Matagalpa and Jinotega, and in the 
mountains near Managua and Granada. These are not 
so large nor so well equipped as those in other countries 
of the Isthmus, and their product is much less than that 
of Guatemala or Salvador, but their development has 
nevertheless greatly increased the commerce of the coun- 
try. It has not, however, affected general economic 
and political conditions so much as it would have if the 
majority of the plantations were not owned and man- 
aged by foreigners. Nicaraguan citizens hold only a 
part of the properties in the southwestern sierras, and 
those in the North are almost entirely in the hands 
of Germans, Englishmen, and Americans. The 
natives have participated less in the prosperity due 
to the new conditions than in any of the other coun- 
tries where coffee has become the principal national 
product. 

The Matagalpa and Jinotega districts have a large 
Indian population, living in little settlements scattered 
through the mountains. These tribes were not sub- 
jugated by the colonial authorities until nearly two 
centuries after the establishment of Leon and Granada, 
and even at the present time, when most of them have 
adopted the Spanish language and religion, they show 
little admixture of white blood. At the time of their 
pacification Jhey received large tracts of land from the 
crown, which they still hold in common and apportion 
at regular intervals among their members. As the 
extent and the exact boundaries of these grants have 
never been definitely settled, they have been a cause 
of constant friction between the native communities and 



94 THE FIVE REPUBLICS 

the white planters. The officials of the central govern- 
ment have often carelessly sold land belonging to the 
Indians to the coffee growers as a part of the public 
domain, and the planters themselves have in some in- 
stances taken possession of the property of the aboriginal 
communities without any right to do so. Projects for 
the surveying of the Indian lands and for the sale of 
those which their owners do not need to the coffee 
planters have for some time occupied the attention of 
the authorities at Managua. 

The labor situation in the northern coffee belt presents 
considerable difficulties. The Indians, who see little 
advantage in exchanging their free life in their own 
villages for one of toil on the plantations, do not furnish 
the regular and dependable supply of workmen which 
are indispensable for the proper cultivation of the plan- 
tations, although they do not refuse to work for a few 
days when they have need for a small sum of ready 
money. Under Zelaya, an attempt was made to solve 
the problem by the passage of a peonage law similar to 
the Ley de Trabajadores in Guatemala. This system 
seems never to have borne so heavily upon the Indians 
as in the latter repubhc, but it at least gave the planters 
a means for securing a regular force with which to 
work their properties. Further aid was furnished by 
the recruiting of laborers by force during the harvest 
time, when many Indians from Matagalpa were even 
forced to travel for many days on foot across the hot 
plains of the interior to work for friends of the admin- 
istration in the sierras south of the lakes. The labor 
laws were abolished by the Conservative administration, 
however, and since 1910 the planters, unable to enforce 
contracts which they make with the Indians, have often 
had difficulties in harvesting their crops. Their position 
has been alleviated somewhat by the fact that the local 
authorities have in many cases illegally enforced the 
old law; but the uncertainty of the labor situation has 



OF CENTRAL AMERICA 95 

greatly discouraged the extension of the plantations and 
the introduction of new capital/ 

The East Coast, which is for all practical purposes 
farther from the cities of the interior than it is from 
New Orleans, has only within the last quarter century 
become an integral part of Nicaragua, for until 1894 it 
enjoyed a sort of independent existence under British 
protection as the " Mosquito Kingdom." This was a 
fictitious state of half-breed Indians and negroes, who 
had from early times maintained commercial and to some 
extent pohtical relations with the nearby settlements of 
English pirates and woodcutters, and through them 
with the governor of Jamaica. In the middle of the 
nineteenth century, when the attention of the world was 
first called to the possibility of constructing an inter- 
oceanic canal by way of the San Juan River, these 
relations were made the pretext for the establishment 
of a protectorate over the entire eastern portion of 
Nicaragua and for the seizure of Greytown, at the 
mouth of the San Juan, which had never even been 
in the domain claimed by the Indians. The territory 
which was thus brought under British control was in 
reahty governed, not by the savage and degenerate 
native chiefs, but by the British and other foreigners 
who had settled along the Coast. The United States 
from the first refused to recognize the protectorate, and 
protested vigorously and in the end successfully against 

^ In a previous chapter, the author has stated it to be his opinion that 
the plantations of Guatemala could be operated successfully without a 
peonage system. The effect of the repeal of the labor laws in Nicaragua 
would seem to prove the contrary, were it not for the great difference 
between the Indians of the two countries. In Guatemala, the Indians 
depend upon the planters for a living, as they have little land of their 
own. They were, moreover, almost wholly an agricultural people before 
the Spanish conquest, whereas the Indians of Matagalpa have always 
secured at least a portion of their food by hunting, and have never been 
accustomed to any but spasmodic and irregular agricultural labor. They 
have also great tracts of land of their own, of which, unlike the tribes in 
Guatemala, they have never been dispossessed. 



96 THE FIVE REPUBLICS 

the violation of Nicaragua's sovereignty. The Clayton- 
Bulwer Treaty, signed in 1850, bound both powers not 
to colonize, occupy, or exercise dominion over any part 
of Nicaragua or Central America, but the British 
government refused to admit that this obliged it to 
withdraw its protection from the Mosquitos, and the 
continued occupation of Greytown, as we have seen, 
was one of the causes which led the people of the United 
States to support the filibustering expeditions of 
Walker. In 1860, Great Britain agreed to abandon 
the protectorate on condition that Greytown should be 
made a free port, and that the Indians should be given 
a reservation in which they were to be free to govern 
themselves in accordance with their own usages. This 
meant that the foreigners on the Coast were practically 
to be at liberty to manage their own affairs without 
interference by the native authorities. The arrange- 
ment was unsatisfactory from the first, for the residents 
of Greytown and Bluefields objected to every exercise 
of Nicaraguan sovereignty, and Great Britain upheld 
them in their attitude, and thus in fact continued to 
exercise a protectorate over them. 

Matters came to a crisis in 1893, when Zelaya made 
a war with Honduras the pretext for sending an army 
into the reservation and seizing the control of the gov- 
ernment. The Indians and the foreigners on the Coast 
protested strongly against this action, but Great Britain, 
wearied of the difficult and equivocal position in which 
her relations with the Mosquitos had placed her, refused 
to uphold them. They had, therefore, no choice but to 
submit. In 1894 a convention called by the Nicaraguan 
commander and dominated by him voted for the com- 
plete incorporation of the reservation into the Republic 
as the Department of " Zelaya," and the Republic has 
ever since exercised complete jurisdiction over the former 
" sambo " kingdom. 

Like other sections of the Caribbean litoral, the East 



OF CENTRAL AMERICA 97 

Coast of Nicaragua is inhabited chiefly by Americans 
and English-speaking negroes. Its principal product is 
the banana. Bluefields, which is the administrative 
center and the seaport, is connected with New Orleans 
by a regular line of small steamers, and has far more 
commercial and financial relations with the United 
States than with the interior. During the Liberal 
regime, many important concessions were granted for 
enterprises in the newly incorporated territory, which 
later became a source of no little embarrassment to the 
government. In some cases the higher officials made 
grants which were actually harmful to the conmiunity 
as a whole, for their own personal profit, while in others 
large tracts of land were ceded or special privileges were 
granted to unscrupulous promoters who had little in- 
tention of carrying out in good faith the obligations 
which they assumed, but who appealed to their own 
governments for aid whenever they became involved in 
disputes with the native authorities. Some of the 
monopohes established, and particularly the exclusive 
right which one company received to operate steamers 
on the Bluefields River, caused great discontent on the 
Coast itself, and led the foreign colony there to take 
a prominent part in organizing and supporting the 
revolution of 1909, by which Zelaya was overthrown. 

The means of transportation between the various sec- 
tions of Nicaragua are as yet very primitive. In the 
interior, they are by no means bad, for it was com- 
paratively easy to build a railroad from Corinto, the 
chief port on the Pacific, to all of the important cities 
of the lake region and to the coffee district west of it; 
and the lakes themselves afford a cheap means of trans- 
portation to the regions around their shores. Matagalpa 
and the northern departments, however, depend upon 
the rudest kind of cart roads, and are almost inaccessible 
in the rainy season. Communication with the Atlantic 
Coast is still more difficult, especially at present, for the 



98 REPUBLICS OF CENTRAL AMERICA 

steamer service which formerly existed on the San Juan 
River has been allowed to deteriorate, and the overland 
route to Bluefields involves several days of traveling 
through a sparsely settled tropical forest on mule back. 
Preparations are now well advanced for the construction 
by American capital of a railway from Bluefields to 
Lake Nicaragua, which would make travel from the 
East to the West Coast comparatively easy. An- 
other road is planned from the main hne of the Pacific 
Railway to Matagalpa, and it seems not improbable that 
this and the Bluefields line may eventually be connected, 
so that it will be possible to cross the Republic from one 
ocean to the other. 

The execution of these projects, and in fact Nica- 
ragua's whole prospect for the immediate future, depend 
upon her relations with the United States. Since 1911, 
both the political affairs and the economic development 
of the country have not been entirely in the hands of 
her own citizens, for the government at Washington, 
in its efforts to promote peace in Nicaragua and in 
Central America, has entered upon a course which has 
forced it on several occasions to intervene decisively in 
the internal politics of the country, and two firms of 
American bankers, as a result of their financial assist- 
ance to the government, have gradually assumed control 
of the customs houses, of the railways, of the currency 
system, and even of the internal revenues of the Re- 
public. The course of events which has brought this 
to pass will be described in Chapter XL 



CHAPTER V 
SALVADOR 

Geographical Description — History — Improvement of Political Conditions 
in Recent Years — Activities of the Government — Agricultural Products — 
Social Conditions — Means of Transportation— Relations with the United 
States — Prospect for the Future. 

Salvador is the most important of the Central 
American republics, after Guatemala, although she 
has a far smaller territory than any of her neighbors. 
Almost all of her total area of 7,225 square miles is 
suitable for cultivation, and there are few parts of it 
which are not inhabited by a dense population. Not- 
withstanding the fact that she has no coast line on the 
Atlantic and has thus been deprived of direct com- 
munication with Europe and the Eastern United States, 
her foreign trade is far greater than that of Honduras 
and Nicaragua, and but little behind that of Guatemala 
and Costa Rica, while her upper classes are more closely 
in touch with the outside world, and have shown a 
greater tendency to adopt foreign customs and practices 
than those of the majority of the other countries. Her 
capital, San Salvador, is a busy, up-to-date commercial 
center, which impresses the traveler as one of the most 
progressive cities of the Isthmus. 

Extending from Guatemala on the west to the Gulf 
of Fonseca on the east,' the Republic occupies a section 
of the broad plain along the Pacific Coast of the 
Isthmus, and like the similarly situated section of 
Guatemala, is traversed by a chain of volcanic peaks, 

^ It should be noted that the Isthmus is bounded by the Atlantic on 
the north and the Pacific on the south in Guatemala, Salvador, and Hon- 
duras, whereas the former ocean lies east and the latter west of Nicaragua 
and Costa Rica. 

99 



100 THE FIVE REPUBLICS 

many of which are still active or have been active within 
very recent times. The soil, consisting mainly of decom- 
posed lava, is extremely fertile. The slopes of the 
mountains are excellently adapted for the cultivation 
of coffee, and in the lower altitudes, although much of 
the country is rough and broken, nearly all of the other 
characteristic Central American products can be grown. 
There is a plentiful rainfall from May to October, and 
an abundant water supply for the dense population is 
provided by several lakes and by a number of streams 
which do not dry up during the rainless season. The 
Lempa, which divides the eastern from the western half 
of the country, after flowing through the northern de- 
partments from its source near the Guatemalan frontier, 
is by far the largest river on the Pacific side of the 
Isthmus. As the more important cities are situated in 
the valleys at the foot of the volcanoes, or in the low 
plains along the coast and on the banks of the Lempa, 
few of them are more than two thousand feet above sea 
level, and their climate is consequently less agreeable 
than that of the most densely populated parts of Guate- 
mala and Costa Rica. Except in the lower Lempa 
Valley, however, the people are fairly healthy, probably 
because the porousness of the soil discourages the breed- 
ing of mosquitoes and thus holds in check some of the 
diseases most prevalent in other parts of the tropics. 

The people are of much the same racial character as 
those of Nicaragua and Honduras, although there seems 
to be rather more Spanish blood in their veins, and less 
admixture of negro, than in those countries. The ma- 
jority are in part at least of Indian ancestry, but all 
speak Spanish, and there are only a few communities 
where the aborigines have maintained their individuality 
and their primitive customs. Among the upper classes, 
the greater number are of pure or nearly pure European 
descent, but Indian blood is no bar to social or political 
prominence. The people as a whole are fairly indus- 



OF CENTRAL AMERICA 101 

trious, considering the climate and the prevalence of 
hookworm and other intestinal parasites, and the 
standard of living among the laboring classes is con- 
siderably higher than in Guatemala or Nicaragua. The 
landowning class is perhaps the wealthiest and the most 
enterprising in the Isthmus. y^,^^^ 

The early history of Salvador w«s as turbulent as .^^^ ^>^' 
that of her neighbors. For many years after the dec-^-^ 
laration of independence she was almost continuously 
in a state of civil war, partly because of the rivalry be- 
tween the political leaders and the jealousy between the 
cities within the state itself, and partly because of the 
incessant quarrels between the state authorities and 
those of Guatemala. « As we have seen, her people 
played a prominent part in the struggles which accom- 
panied the first attempt to establish a Central Ameri- 
can federation. The prolonged war in which the citizens 
of Salvador and of one section of Honduras overthrew 
the Conservative government in Guatemala in 1829 
was followed within three years by new difficulties which 
led President Morazan in his turn to remove the state 
authorities in San Salvador and to transfer to that city 
the seat of the federal administration. From then until 
the final fall of the great unionist leader, Salvador was 
frequently involved with one or another and at times 
with all of her neighbors, because of the opposition of 
the latter to the federal authorities. She was the last 
of the five states to admit the dissolution of the union, 
and at the present time she is the chief center of the 
party which favors its restoration. 

The Liberal party, which had supported Morazan, 
was driven from power by the intervention of President 
Carrera of Guatemala in 1840, and for ^Ye years 
the government was under the control of Francisco 
Malespin, one of Carrera's friends, who used his posi- 
tion as comandante de armas to make and immake 
presidents and to dominate the policy of the civil 



\0 



102 THE FIVE REPUBLICS 

authorities. The Liberals were able to return to power 
in 1845, after a bloody struggle in which Malespin, 
although now estranged from Carrera, was assisted by 
the government of Honduras. They were again driven 
out in 1852 by Carrera, and four Conservative leaders 
occupied the presidency for short terms. The Liberals, 
under the leadership of Gerardo Barrios, regained power 
in 1860, but were forced to relinquish it two years later 
as the result of another war with Carrera. In 1863, the 
Conservative leader, Francisco Duenas, became presi- 
dent, and conducted the government efficiently and 
successfully until 1871, when the Liberal party, which 
was at the same time carrying on successful revolutions 
in Guatemala and Honduras, defeated him and placed 
at the head of the state Santiago Gonzalez, who remained 
in office until 1876. His successor, Andres Valle, be- 
came involved in another war with Guatemala, arising 
from an intervention by both states in the internal 
affairs of Honduras, and was replaced by Rafael Zal- 
divar, one of the leading followers of the former presi- 
dent Duenas. This able ruler remained in office until 
1885, maintaining the friendliest relations with President 
Barrios of Guatemala, despite the fact that one belonged 
to the Conservative and the other to the Liberal party. 
When Barrios attempted to renew the Central American 
Union by force, and entered upon the campaign which 
ended so disastrously for him at Chalchuapa, however, 
Zaldivar took the field against him. A short time after 
this war, Zaldivar was forced to resign by a revolution 
headed by Francisco Menendez, and the latter was 
president until his death in 1890. After him, the 
Republic was ruled by the Ezeta brothers, two mihtary 
leaders who seized the presidency by a coup d'etat and 
maintained themselves in office by despotic and rather 
barbarous methods imtil they were overthrown by an 
uprising in the city of Santa Ana in 1894. Rafael 
Gutierrez, who became president in that year, was an 



OF CENTRAL AMERICA 103 

able and patriotic executive, but some features of his 
administration caused considerable discontent, and his 
participation in the Treaty of Amapala, by which 
Salvador entered into a loose union with Honduras 
and Nicaragua, caused his fall in 1898. 

The new president. General Tomas Regalado, served 
his full term and passed on the chief magistracy in 
an orderly manner to Pedro Jose Escalon in 1903. 
From that time there has not been a successful revolu- 
tion in Salvador, although discontented political leaders 
have occasionally made ineffectual attempts to over- 
throw the government. In 1906, General Regalado, 
who was very influential in the administration of Presi- 
dent Escalon, brought about a short and purposeless 
war with Guatemala, which ended with the death of its 
author on the battlefield. In 1907 there was another 
war, between Salvador and Nicaragua, about the presi- 
dency of Honduras, and in that and the following year 
President Zelaya of Nicaragua attempted several times, 
without success, to promote revolutions against the 
governments of Escalon and of Fernando Figueroa, 
who succeeded him. The Government of the United 
States exerted its good offices to put an end to the 
hostilities between the two countries, and finally threat- 
ened to use force if necessary to put an end to Zelaya's 
attacks on his neighbor, but peace was not entirely re- 
established until the Nicaraguan president was over- 
thrown in 1909. Figueroa was succeeded by Manuel 
Enrique Aran jo in 1911. This president was assassi- 
nated in 1913, and the vice-president, Don Carlos 
Melendez, completed the unexpired term and was re- 
elected to the chief magistracy in 1915. 

In the confused political history of Salvador, two 
important facts stand out: first, that the revolutions 
which occurred so frequently during the seventy-five 
years following the declaration of independence were 
due more to the interference of the other countries, and 



104 THE FIVE REPUBLICS 

especially of Guatemala, than to the strife of factions 
at home; and second, that in recent times, when this 
kind of interference is no longer so frequent, there has 
been a remarkably rapid progress towards the estab- 
lishment of a more stable form of government. For 
three-quarters of a century after 1821, the internal tran- 
quillity of the country may be said to have been almost 
entirely dependent upon its relations with its neighbors. 
The parties which were formed during the turbulent 
years of the Central American Union continued to act 
together long after the states which made up the Union 
had become independent nations, and Conservative gov- 
ernments in Guatemala continued to regard themselves 
as the natural enemies of Liberal administrations in 
Nicaragua and Salvador, largely because of the bitter 
animosity between the leaders, which had been en- 
gendered by the events of the years 1821-40. Discon- 
tented factions in Salvador never hesitated to call in 
assistance from other countries to overthrow a hostile 
government at home, and the presidents of the other 
countries on their side were always ready to intervene 
to secure the estabhshment of a friendly administration 
in Salvador, in order to increase their own influence and 
to make more secure their own position. As the leaders 
who had participated in the wars under the Federation 
died, however, and the parties lost their fundamental 
economic and social characteristics, so that there was 
little real difference in principles or point of view be- 
tween the Liberals of one country and the Conserva- 
tives of another, factional politics ceased to a great 
extent to be international. Intervention to overthrow 
a government of opposite pohtical complexion was then 
no longer so necessary as a measure of self-preservation, 
as it had been when every Liberal or Conservative who 
came into power in one of the states felt it his duty 
to use all of the resources at his command to secure 
the domination of his own party in the others. Guate- 



OF CENTRAL AMERICA 105 

mala has not played a decisive part in overthrowing a 
president of Salvador since the battle of Chalchuapa 
in 1885, and Honduras and Nicaragua have now fallen 
so far behind their neighbor in population and resources 
that their intervention is no longer seriously to be feared. 
The attempts of the president of the latter country to 
encourage revolutions in Salvador in 1907 and 1908 were 
failures, although they caused the government consider- 
able uneasiness and expense. 

Since 1908, moreover, international wars between the 
Central American states have been made practically 
impossible by the fact that the United States has em- 
ployed diplomatic pressure and sometimes actual force 
to secure the observance of the Washington Conventions 
of 1907, by which the five countries pledged themselves 
to abstain from interfering in each other's internal 
affairs. At the present time it is not probable that an 
army from one state would be allowed to invade one 
of the others for the purpose of bringing about a change 
of government. The prevention of this kind of aggres- 
sion, of which there were instances almost every year 
before 1907, has done much to discourage revolutions 
in Central America, because there is little chance, except 
in cases where there is a very general and very violent 
popular discontent with the government in power, for 
a revolt to succeed without active assistance from outside. 

Since the character of her international relations has 
changed so that external influences no longer make the 
establishment of internal peace impossible, Salvador 
has become one of the most orderly and best governed 
of the Central American republics. Her political af- 
fairs are almost entirely in the hands of a small educated 
class, among whom landed proprietors are more power- 
ful and professional politicians and revolutionists on 
the whole less numerous and less influential than else- 
where in the Isthmus. This class was for many years 
divided within itself into hostile factions, which were 



106 THE FIVE REPUBLICS 

kept alive, long after the disappearance of their original 
sources of difference, by the intrigues and interventions 
of the neighboring governments. After the violent 
animosities created by the wars during the first Central 
American Union died out, however, and after the cul- 
tivation of coffee and the development of commerce had 
opened up greater opportunities for the acquisition of 
wealth and power than were offered by the contest for 
public offices, the ruling class as a whole turned its 
attention from pohtics to agriculture. The damage 
inflicted by the frequent civil wars was severely felt by 
the proprietors of the plantations, who were realizing 
for the first time the possibilities of the new life which 
the importation of foreign luxuries and the ability to 
travel abroad placed before them, and they consequently 
became almost a unit in their desire for peace and a 
stable government. An attempt to start an old-fashioned 
revolution at the present time, unless there were some 
strong reason for desiring to overthrow the government, 
would probably meet with determined hostility among 
the greater part of the wealthier and more intelligent 
classes. 

It cannot be said, however, that Salvador is in- 
herently a peaceful country in the same sense in which 
this is true of Costa Rica. The lower classes have no 
more inborn respect for authority and love of peace than 
have those of Nicaragua and Honduras, whom they 
strongly resemble in their racial characteristics and 
customs, and a large element among them have always 
taken part in wars and revolutions with the same gusto 
that is shown by the mestizos of the more turbulent 
countries. If they are on the whole less prone to revolt, 
this is due to the fact that they are fairly contented 
under present conditions, and that they are held under 
control by a much stronger and better organized military 
power than in those countries. The government is main- 
tained in office, not by popular respect for authority or 



OF CENTRAL AMERICA 107 

by the will of the people, but by force, for there are 
always elements, even among the upper classes, which 
are awaiting an opportunity to overthrow it. 

There is at present, however, no organized opposition, 
as the old historical parties have nearly died out and 
the formation of new ones has been discouraged by the 
poHcy of the government, which generally either wins 
over discontented political leaders by the gift of offices 
or money, or forcibly prevents them from carrying on 
propaganda hostile to it. In former times, opponents 
of the group in power were exiled or even murdered, 
but recent administrations have attempted rather to 
conciliate their opponents and to maintain the good will 
of the common people, and there has been little 
of the severity towards defeated rivals which has 
helped to keep alive factional hatred in Guatemala 
and Nicaragua. Nevertheless, opposition to the 
government is still suppressed with a firm hand, 
and murders for political purposes are by no means 
unknown. 

The political institutions are no more democratic than 
those of the neighboring countries. Except where a 
successful revolution intervenes, the presidency is passed 
on by each incumbent to a successor of his own choosing, 
and all of the other nominally elective offices are filled 
in accordance with the wishes of the administration, 
since the authorities control the elections by preventing 
the nomination of opposition candidates and by exerting 
pressure on the voters. Every department is under 
the absolute personal control of the president, so far 
as he wishes to exercise his authority, and the responsi- 
bility for everything which occurs during the adminis- 
tration rests upon his shoulders. The Congress has 
at the present time some degree of independence, and 
the judiciary is not subjected to the same dictation by 
the executive as in some of the other countries, but 
neither is in any real sense co-ordinate with the latter. 



108 THE FIVE REPUBLICS 

nor would be able to resist it if a serious difference of 
opinion arose. 
)^ Of late years, however, the presidents of Salvador 
have made little attempt to exercise the absolute and 
arbitrary authority which some of the recent rulers of 
Guatemala and Nicaragua have enjoyed, for they have 
generally been content to abide so far as possible by the 
provisions of the constitution and to relinquish their 
office to one of their supporters at the end of their legal 
term. Since 1898, with a single exception, changes 
of administration have taken place without the inter- 
vention of force, and the one president who was 
assassinated was followed by the constitutionally elected 
vice-president, without disorder or further bloodshed. 

The chief support of the government is the army, 
which is better trained and better equipped than that 
of any other Central American country. A large pro- 
portion of the soldiers, apparently, serve voluntarily. 
Moreover, many remain with the colors for long periods, 
and learn to take a certain amount of pride in their 
calling. The officers are of an unusually high type, 
because the comparatively good salaries and the educa- 
tion offered by the Polytechnic School have induced 
many young men of the better classes to adopt the 
military profession as a career. Both officers and men 
seem on the whole to be loyal to the government and 
show little tendency to political intrigue, — a statement 
which cannot be made with regard to the forces of 
some of the other republics. The army is far larger 
than the wealth or the actual necessities of the country 
would seem to justify, and heavy expenditures upon 
it have been a source of some discontent; but the exist- 
ence of a well-organized and well-trained body of troops 
has undoubtedly been a strong factor in favor of stable 
government and a valuable protection against attack 
from without. 

The civil police is also efficient and well equipped 



OF CENTRAL AMERICA 109 

compared with that of the neighboring countries. Besides 
the usual city forces, there is an organization called the 
Guardia Civil in the rural districts near the capital which 
patrols the roads and does much to protect life and prop- 
erty. Crimes of violence, however, are by no means 
uncommon, and are very frequently allowed to go un- 
punished, for the activity of the army and the poHce, as 
in the other Central American countries, is directed more 
towards the maintenance of the authority of the govern- 
ment than towards the prevention of wrongdoing. The 
suppression of revolts and the control of all parts of the 
Repubhc by mihtary force is easier than in any of the 
neighboring countries, because of the small area to 
be pohced and the denseness and compactness of the 
population. 

The chief functions performed by the government are 
the preservation of order, the management of the customs 
houses and the other sources of income, and the operation 
of such fundamentally necessary pubhc services as the 
postal and telegraph systems. A comparatively small 
amount of money, considering the wealth of the country, 
is available for other purposes, because of the hea\y cost 
of the mihtary establishment and the losses due to inef- 
ficiency and peculation in the collection and expenditure 
of the revenues. Sanitary measures and pubhc instruc- 
tion have not received the attention which might be ex- 
pected among so progressive a people and httle has been 
done, except by private initiative, to develop the resources 
of the country or to stimulate foreign conmaerce. 
Although abortive attempts have been made from time 
to time to estabhsh agricultural and industrial schools, 
the government has httle interest in such institutions, and 
has never given them sufficient funds to accomphsh any- 
thing of great value. The system of highways, which is 
of especial importance because of the hvely internal 
commerce, leaves much to be desired, but its defects are 
due more to almost insurmountable difficulties arising 



lia THE FIVE REPUBLICS 

from heavy rainfall and from the physical formation 
of the country than to lack of interest. There are, how- 
ever, cart roads, which are fairly good in the dry season, 
in all parts of the Republic, and near the capital there 
are several roads suitable for automobiles, which are 
owned by many of the wealthy people of the city. 

The public schools have received less attention than in 
some of the other countries. The Department of Public 
Instruction, which possesses many well-informed and able 
officials, has done what it could with the scanty resources 
at its command, but the government has not supported 
it with adequate appropriations, and has not always 
shown care or impartiahty in the appointment of teachers. 
Only about one-fourth of the children between six and 
fourteen years of age are receiving instruction.^ The 
schools in the capital and in the larger cities, although 
badly equipped and very badly housed, do excellent work, 
and the visitor cannot fail to be impressed by the enthu- 
siasm shown by the children and by the teachers. The 
latter are generally inadequately trained, but they appear 
to have a natural gift for arousing the interest and hold- 
ing the attention of their pupils. In the country, educa- 
tional opportunities are much more limited, for the rural 
schools have but three regular grades, with a comple- 
mentary year in which instruction in some trade is given, 
and there is little opportunity for the children to receive 
a secondary education unless they can afford to spend 
five years completing their primary course in one of the 
cities. The education of the lower classes has been pur- 
posely restricted to a few fundamentals, because the 
authorities have desired to discourage the tendency, so 
harmful in all parts of Central America, towards the 

^According to figures furnished to me by Sr, Juan Lainez, Director of 
Primary Instruction, there are 245,251 children between the ages of six and 
fourteen in Salvador, of whom 60,860 are enrolled in public and private 
schools. The average attendance is considerably less than the number 
enrolled. The budget for Public Instruction for the year 1916 was 
$1,205,074.44, or approximately $408,000 in U, S. currency. 



OF CENTRAL AMERICA 111 

adoption of the learned professions at the expense of 
agricultural pursuits. No government aid is now granted 
to poor children for advanced study either at home or in 
foreign countries, and every effort is made rather to 
encourage those who have completed their primary course 
to fit themselves for the cultivation of the soil or for some 
trade. In the capital, schools have just been inaugurated 
where practical instruction for this purpose is given. 
There are a number of secondary institutions in the larger 
cities which compare favorably with those in other parts 
of Central America, although they also suffer from lack 
of funds and from the absence of well-trained teachers. 
The same is true of the University, where law, engineer- 
ing, pharmacy, and other professions are taught. The 
wealthier families educate their children in private in- 
stitutions rather than in the public schools, and more and 
more young people at the present time are being sent 
to complete their studies in foreign countries, and espe- 
cially in the United States. 

The administration of public affairs is considerably 
less corrupt and somewhat more efficient than in Guate- 
mala, Nicaragua, or Honduras. The integrity of many 
of the higher officials is above suspicion, and theft is 
apparently not practiced on a large scale in any depart- 
ment of the government. The judiciary is neither so 
hopelessly venal nor so inefficient as in some of the other 
countries, and the Supreme Court is a body which com- 
mands general respect. The administration of the postal 
and telegraph systems is fairly reliable, although it is 
typically Central American in its methods and in its 
spirit. Conditions are nevertheless very far from what 
they should be. Even at the present time, under a presi- 
dent whose honesty and whose progressive ideals are 
doubted by no one, public officials are too often appointed 
for purely personal reasons rather than with any regard 
to their fitness, and graft is practiced more or less openly 
in all of the departments, with the knowledge, if not with 



112 THE FIVE REPUBLICS 

the consent, of the higher authorities. Large amounts of 
money are paid from the public treasury on different 
pretexts to poHtical leaders whom the administration 
desires to conciliate, and men of little ability or patriotism 
are given positions of responsibility and authority for 
which they are not at all fitted, and in which their conduct 
is not infrequently scandalous. These conditions are to 
a great extent beyond the control of the government, for 
an administration which failed to consohdate its power 
by such methods probably could not maintain itself very 
long in office. The old-style professional revolutionists, 
many of whom have a considerable following among the 
lower and middle classes, are still too powerful to be 
disregarded, and the idea that offices and graft are the 
legitimate rewards of political activity is no less para- 
mount than formerly. There is every prospect, however, 
that political conditions will improve as the government 
becomes more stable, and as public opinion, already a 
powerful influence for good, becomes more enlightened 
and exerts more control over the factional leaders. 

Economically, Salvador is one of the most prosperous 
countries of the Isthmus. Her principal product is cof- 
fee, grown on the slopes of all the higher volcanoes and 
hills, which is exported to the amount of from sixty to 
seventy milhon pounds annually to France, the United 
States, and other countries. In the lower parts of the 
country, there are many large cattle ranches and cane 
plantations, which produce meat and sugar for local con- 
sumption. Corn is raised everywhere, even more than in 
other parts of Central America, because of the denseness 
of the population and because of the large per capita 
consumption. One small section of the Pacific Coast, 
called La Costa del Bdlsamo, is notable for its exports 
of balsam of Peru, a forest product which is found in 
its wild state only in this one spot.' The trees from 

^ It has been introduced into Ceylon. Encyclopcedia, Brittanica, article on 
*' Balsam." 



OF CENTRAL AMERICA 113 

which this medicinal gum is extracted have within recent 
years been brought under systematic care in large plan- 
tations, and have proved a source of considerable wealth 
to the native capitahsts, as well as to the Indians who 
collect the balsam in the forest by primitive methods. X 

The upper classes are as enterprising and progressive 
as any social group in Central America. A large pro- 
portion of them have traveled abroad and have adopted 
foreign ways of living at home, and as a whole they have 
shown a responsiveness to new ideas and an energy and 
patriotism which promises much for the future of their 
country. The owners of the large plantations live in 
the cities, but they take a deep interest in the manage- 
ment and development of their properties, and usually 
spend a portion of the year upon them. Few are free 
from the Central American tendency to extravagance 
and improvidence, but they have nevertheless been suf- 
ficiently enterprising and progressive to maintain their 
dominant position in the economic life of the country 
while the resources of the other republics have been fall- 
ing more and more into the hands of Europeans and 
J^'orth Americans. There are some rich agriculturalists 
who are foreigners, but they are relatively few as com- 
pared with those in Guatemala and Nicaragua. The 
great majority of the more valuable plantations still 
belong to citizens of Salvador, and much of the stock 
in the banks and in the more important industrial enter- 
prises is controlled by native capital. This fact is of 
great significance, because it indicates that the people 
of the Republic have adapted themselves to modern con- 
ditions more readily than have their neighbors. The 
preservation of the class which furnishes the natural 
leaders and rulers of the community cannot but have 
a beneficial social and pohtical effect. 

The lower classes, housed in dirt-floored thatched huts, 
and subsisting on a diet in which the corn tortilla is the 
chief feature, offer a striking contrast to their wealthy 



114 THE FIVE REPUBLICS 

and Europeanized superiors, but they are nevertheless 
somewhat better off than in any of the neighboring 
repubhcs except Costa Rica. The majority of them 
have regular work on the plantations, where they are 
supplied with homes and food and receive wages which 
compare favorably with those paid in Honduras and 
Nicaragua. Their standard of living is somewhat higher 
than in those countries, and they are in general better 
treated both by their employers and by the authorities. 
A large proportion of the laborers on the bigger planta- 
tions are given patches of land to cultivate for them- 
selves. In the central part of the country there are many 
small landholders, who find a ready market for their 
products in the cities, and are enabled by the possession 
of a regular money income to enjoy many little luxuries 
which are unknown in the more backward parts of the 
Isthmus, "i 

In the ci^es, and especially in the capital, small-scale 
commerce and manufacturing are very active. Great 
quantities of vegetables, milk, firewood, and other country 
products are daily brought into town in ox-carts by the 
peasants, who exchange them for the manufactured 
articles which they need, and the market and the count- 
less small stores in the vicinity are always a scene of 
great animation. There are a number of little manu- 
facturing establishments, where candles, shoes, soap, and 
cigarettes are made, chiefly by hand labor, and the prod- 
ucts of these are bought by the lower classes in surpris- 
ingly large amounts. Only a few of the smaller com- 
mercial estabhshments, however, belong to natives of 
the country, for the greater part of the retail trade is 
in the hands of foreigners. 

External commerce has attained large proportions, 
despite the fact that the Republic has no access to the 
Atlantic. As in the other countries of the Isthmus, 
there are few North American merchants; and Enghsh, 
German, and Dutch houses control the import and 



OF CENTRAL AMERICA 115 

wholesale trade. Until the outbreak of the European 
war, Salvador purchased a smaller proportion of her 
imports from the United States than did any of the other 
republics of the Isthmus, but this condition has neces- 
sarily changed within the last two years. Of the exports, 
the coffee, which is the only item of first importance, is 
shipped to some extent to San Francisco, but more to 
France and Germany. 

Both external and internal commerce have been greatly 
aided by the fact that the territory of the Republic is 
so small, and that all parts of it are so close to the 
Pacific Coast. The problem of transportation has not 
been nearly so difficult as in some of the other countries. 
There are now few important towns which have no 
railway connection. The most important line is that of 
the Salvador Railway Company, an English corporation 
which provides a cheap, rapid, and in every way excellent 
service from the capital and Santa Ana to Sonsonate 
and Acajutla. Over this passes the greater part of the 
freight and passenger traffic, for Acajutla, although 
merely an open roadstead, where loading and unloading 
is difficult and expensive, is the principal port of the 
RepubHc. Another line is being built by the Interna- 
tional Railways of Central America, the American con- 
cern which operates the Guatemala system, from La 
Union on the Gulf of Fonseca to San Salvador. This 
passes through many important cities in the eastern 
departments, and has now reached San Vicente, about 
forty miles from the capital. The service is not so good, 
and the rates are higher than on the Salvador Railway 
Company's line, and the usefulness of the road is greatly 
diminished by the fact that its builders have as yet failed 
to construct a permanent bridge over the Lempa River, 
to cross which freight and passengers must submit to a 
disagreeable and hazardous transfer in scows during the 
rainy season. It is, however, of immense importance to 
the rich sections through which it passes, and when it is 



116 THE FIVE REPUBLICS 

completed, connecting the capital with the land-locked 
harbor of La Union, it will not only provide a new outlet 
for the commerce of Salvador, but will also open a much 
more rapid and convenient route to Honduras and 
Nicaragua, which are reached in a few hours by water 
from La Union. The same company plans to build a 
line from Santa Ana to Zacapa, on the Guatemala 
Railway, which will make both San Salvador and La 
Union accessible directly by railway from Puerto Barrios 
on the Atlantic. When this is done, the journey from 
the United States to each of the three central republics 
of the Isthmus will be shortened by several days. 

Besides the ports mentioned, Salvador possesses two 
others. La Libertad, immediately south of the capital 
but separated from it by a steep range of hills, is an open 
roadstead from which a large amount of coffee produced 
in the neighborhood is shipped. El Triunfo, on a rather 
shallow bay east of the Lempa River, is close to another 
coffee-growing district, but it will have to be greatly 
improved before it can be made a regular port of call 
for large steamers. Both of these are connected with 
their tributary country by cart roads, which are good 
in the dry season, but become very bad when it rains. 

As elsewhere on the Pacific Coast of Central America, 
there has been hardly any steamship service at these 
ports since the beginning of the European war except 
that of the Pacific Mail, whose ships touch there at 
irregular intervals and afford expensive and rather 
unsatisfactory accommodations for freight and passen- 
gers. The Pacific Steam Navigation Company also 
operates one small steamer, formerly the property of 
the Salvador Railway Company, between Panama and 
Salina Cruz, stopping at most of the ports on the way, 
and the government of Salvador owns a still smaller 
vessel which plies between the ports of the Republic 
and San Jose, Guatemala. Salvador suffers far more 
from the inadequacy of the West Coast steamship service 



OF CENTRAL AMERICA 117 

than do any of the other countries, for Guatemala and 
Costa Rica have excellent connections with the United 
States and Europe by way of their Atlantic ports, and 
Nicaragua and Honduras have comparatively a small 
amount of foreign commerce. The Republic will not 
be able to develop as it should until its connections with 
the outside world are greatly improved. 

The relations between Salvador and the United States 
have never been so close as in the case of those republics 
where more American capital has been invested and 
where regular and direct steamer communications have 
encouraged commerce and travel; and in recent years 
the friendship between the two countries has been endan- 
gered, although it has by no means been destroyed, by 
political questions. The influence exerted by the United 
States in the internal poHtics of some of the nearby 
countries, especially in the case of Nicaragua, and the 
proposal to establish an American naval base in the 
Gulf of Fonseca, close to the port of La Union, have 
greatly alarmed public sentiment in Salvador, and have 
called forth strong but ineffectual protests from her 
government. This fear of what the people of the 
Repubhc regard as American tendencies towards expan- 
sion has caused a rather marked distrust and dislike of 
the United States among certain classes, — a feeling 
which can be dispelled only by the most careful regard 
for Central American rights and susceptibilities in the 
future. With frankness and fair treatment on both 
sides, however, the relations between the two republics 
are bound to grow more friendly as they grow closer; 
for the influence of the increasingly large number of 
natives of Salvador who travel and study in North 
America, and of the Americans who are now in Salvador, 
should do much to bring about a better understanding. 

The prospect for the future of Salvador seems very 
bright. Political and social conditions are improving 
steadily, and the prosperity of the Republic, with its 



118 REPUBLICS OF CENTRAL AMERICA 

fertile soil and industrious population, seems secure. The 
progressive spirit of the ruling classes and their rapid 
absorption of foreign ideas afford reason to believe that 
the control of the economic life of the country by foreign 
interests, which is becoming more and more marked 
elsewhere in the Isthmus, may here be avoided. The 
introduction of foreign capital is of course very necessary 
for the development of the country, as is the immigration 
of foreigners of the better class, but it is to be hoped 
that this may take place without resulting in the impov- 
erishment and the decay of the leading native families. 
If the best people of the Republic can continue in the 
future to play the part which they play at present in 
politics and agriculture, the little country promises to 
remain one of the most prosperous and most civilized 
states in tropical America. 



CHAPTER VI 
HONDURAS 

General Description — History — Effects of Continual Civil War — Lack of 
Means of Communication — Backwardness of the People — The North Coast. 

The territory of Honduras may be roughly described 
as a triangle, the base of which is formed by 
the shore of the Caribbean Sea, and the other sides by the 
Guatemala- Salvador boundary on the southwest and by 
that of Nicaragua on the southeast. At the apex, on 
the south, there are a few miles of coast on the Gulf of 
Fonseca which give the Repubhc its only outlet on the 
Pacific. The country is very mountainous, but, unhke 
its neighbors, is in no part of volcanic origin, for the 
chain of craters which elsewhere traverses the Isthmus 
several miles inland from the coast passes by Honduras 
through the conical islands of the Gulf of Fonseca, leav- 
ing the mainland entirely outside of the belt of decom- 
posed tufas which forms the most fertile agricultural 
districts of other parts of Central America. There are 
thus none of the rich eruptive plains and gently sloping 
mountainsides which have encouraged the establishment 
of the great coffee and sugar plantations of Guatemala 
and Salvador and have made it possible for the regions 
near the Pacific Coast in all of the other coimtries to 
support dense populations. The southern portion of 
Honduras is occupied by a series of rugged mountain 
chains, where only small amounts of land in the valleys 
are suitable for cultivation and the rainfall is scanty and 
irregular. The first Spanish settlements were estabhshed 
in this district, notwithstanding the difficulties of raising 
food and transporting suppHes from the outside world, 

119 



120 THE FIVE REPUBLICS 

because of the gold and silver mines, which in colonial 
times made Honduras one of the most important prov- 
inces of the Isthmus; and when the mines were aban- 
doned, during the years of anarchy which followed the 
declaration of independence, the inhabitants still clung 
to their decayed villages and supported themselves as 
well as they could by agriculture. North of the conti- 
nental divide, the mountains are lower and less precipi- 
tous, and there are great stretches of open savannahs 
and pine-covered hills, where the rainfall is plentiful and 
the grass is green at all seasons of the year. The soil 
is not very fertile, except in the river bottoms, but the 
region is admirably adapted for the raising of cattle. 
The cities of the south and of the interior are still the 
center of the political life of the country, but since the 
development of the banana trade they have been rapidly 
outstripped in economic importance by the newer towns 
created by foreign enterprise on the North Coast. The 
region near the Caribbean Sea is a low plain, extending 
for many miles into the interior, traversed by scattered 
mountain ranges and by several large, slow-flowing 
rivers. Here there are many settlements of North 
Americans, West Indian negroes, and natives, who are 
occupied chiefly with the cultivation of bananas. 

The people are a mixed race. Spanish is the only 
language, and Cathohcism the only religion, but even in 
the cities there are few persons who are entirely white, 
and in the country districts, although there are almost 
no pure-blooded Indians except on the uncivilized Mos- 
quito Coast, the majority of the inhabitants have far 
more American and African than European blood. The 
aborigines of Honduras were never so numerous or so 
civilized as those of Guatemala, Salvador, and Nicaragua, 
and they were exterminated after the conquest to a 
somewhat greater extent than in those countries because 
of the hard labor in the mines; but their characteristics 
are nevertheless those which are most marked in the half- 



OF CENTRAL AMERICA 121 

breed population of today. Negro blood also is very 
evident in the people in the regions north of the conti- 
nental divide, and in many places, especially near the 
coast, seems to predominate over the other racial con- 
stituents. It was far easier for runaway West Indian 
slaves and other immigrants of the same color to reach 
the interior from the Caribbean Coast of Honduras 
than elsewhere in the Isthmus, because the country back 
of the coast line was more open and more attractive, to 
them, on account of its warm climate. What effect this 
element has had on the development of the Republic it 
is difficult to say, but it is possible that it may account 
in some measure for the backwardness of most of the 
regions in which it is found. 

The central position of Honduras has forced her, 
whether she wished to or not, to take part in nearly 
every international conflict which has occurred in the 
Isthmus; and the continual intervention of her stronger 
neighbors in her internal affairs, combined with factional 
hatred and greed for the spoils of office on the part of 
her own citizens, have kept the Republic in a state of 
chronic disorder down to the present time. Because of 
the economic backwardness and the isolation of her peo- 
ple, she has been affected comparatively little by the 
factors which have in recent years tended to discourage 
internal disorder and civil strife in Salvador. Her gov- 
ernment has never become so strong that it was able to 
repel aggression from without or to hold in check its 
enemies at home, and no part of her territory, with the 
possible exception of the North Coast, has reached a 
stage of agricultural or industrial development suffi- 
ciently high to give rise to a class of plantation owners 
or capitalists more interested in the maintenance of peace 
than in the dominance of one or the other poHtical fac- 
tion. She does not enjoy the favorable climate and the 
fertile soil which have encouraged the development of 
the great agricultural enterprises of the neighboring 



122 THE FIVE REPUBLICS 

states, and she has been prevented from using the very 
valuable natural resources which she does possess by- 
constant disturbances promoted both by external and by 
domestic enemies. 

Dissensions within the covmtry broke out soon after 
the authority of Spain was thrown off in 1821. The 
Spanish governor at Comayagua, who had already 
repudiated the authority of the Captain General in 
Guatemala, was opposed by the people of Tegucigalpa 
and several other towns, and his attempts to establish 
his supremacy were the beginning of a desultory conflict 
which lasted with few intermissions for a number of 
years. After the establishment of the Federal Union, 
Comayagua sided with the Conservatives and Teguci- 
galpa with the Liberals, and an army from the latter 
city, led by Morazan, played a large part in defending 
Salvador and in overthrowing the federal authorities in 
1829. The triumph of the revolution in Guatemala led 
to the establishment of a Liberal state government in 
Honduras, but this fell after the disruption of the Union, 
when President Carrera of Guatemala aided the Con- 
servatives to return to power (1840). From that time 
until 1911, the Republic was kept in a state of turmoil 
by a series of revolutions and civil wars, instigated and 
often actively participated in by Guatemala, Salvador, 
or Nicaragua, and sometimes by all three. Francisco 
Ferrer, supported by Carrera, held the supreme power 
from 1840 to 1852, first as president and then as com- 
mander-in-chief of the army. His successor was Trinidad 
Cabanas, a Liberal, who had been in office only three 
years when Carrera sent an army into the country to 
supplant him by Santos Guardiola. This ruler was 
assassinated in 1862. His successor, allying himself to 
Salvador, became involved in a war against Guatemala 
and Nicaragua, and the victory of the two latter states 
resulted in the " election " of Jose Maria Medina as 
president of Honduras. He was overthrown in 1872 



OF CENTRAL AMERICA 123 

by the intervention of the Liberals who had just returned 
to power in Guatemala and Salvador. Ponciano Leiva 
assumed the chief magistracy in the following year, but 
was forced to relinquish it in 1876 by the intrigues of 
President Barrios of Guatemala. Marco Aurelio Soto, 
a man of ability and great influence, succeeded him, but 
he was also forced to resign in 1883 because of the hos- 
tile attitude of Barrios, and was succeeded by Luis 
Bogran, who held office until 1891. Ponciano Leiva, 
who followed Bogran, was again forced to resign in 1893 
by a threatened revolution. His successor, Domingo 
Vasquez, was overthrown a year later as the result of 
a disastrous war with Nicaragua, and Policarpo Bonilla, 
an ally of President Zelaya and an ardent Liberal, 
became president. After one constitutional term, he 
turned over his office to General Terencio Sierra. Sierra 
was overthrown in 1903 by Manuel Bonilla, who had 
started a revolution when the president made an attempt 
to impose on the country a successor of his own choosing. 
In 1907, as the result of a quarrel between Bonilla and 
President Zelaya of Nicaragua, the latter sent an army 
into Honduras to aid a revolutionary movement headed 
by Miguel Davila. Salvador, fearing the increase of 
Zelaya's influence, came to the aid of Bonilla, but was 
unable to prevent the complete victory of the revolution. 
Zelaya now threatened to attack Salvador, and the presi- 
dent of that country, in league with Guatemala, prepared 
to support a counter revolution in Honduras. A general 
Central American war would undoubtedly have followed, 
had not the United States and Mexico jointly interposed 
their mediation and suggested that all of the repubhcs 
of the Isthmus send representatives to Washington to 
discuss the questions at issue between them. This was 
the origin of the celebrated Washington Conference. 
One of the most important conventions adopted by the 
delegates of the five countries provided for the complete 
neutrahzation of Honduras and the abstention of her 



124 THE FIVE REPUBLICS 

government from all participation in the conflicts between 
the other governments of the Isthmus/ 

This treaty had little effect for the time being on the 
situation of Honduras, for nearby countries encouraged 
and materially assisted a number of uprisings against 
the government of Davila during the four years follow- 
ing 1907. Zelaya helped his ally to suppress these, but 
when the Nicaraguan dictator himself fell the fate of 
the administration which he had protected in Honduras 
was sealed. Manuel Bonilla invaded the Republic from 
the North Coast in the latter part of 1910, and decisively 
defeated Davila's troops after a few weeks of fighting. 
When it was evident that the revolutionists were gaining 
the upper hand, a peace conference was arranged through 
the mediation of the United States, and both factions 
agreed to place the control of affairs provisionally in the 
hands of Dr. Francisco Bertrand. In the election which 
followed, Bonilla was made president by an almost 
unanimous vote. He held office until his death in 1913, 
when Dr. Bertrand, the vice-president, succeeded him. 
The latter is still at the head of affairs, having been 
reelected in 1915. 

Today, more than ever before, there seems to be good 
reason to hope that Honduras may enjoy a long period 
of peace. A large part of the people are wearied of 
the continual disturbance in which they have lived, and 
are beginning to distrust the factional leaders who have 
hitherto been able to incite them to revolt at every unpop- 
ular or aggressive action of the authorities. The gov- 
ernment of Dr. Bertrand has pursued a conciliatory 
poHcy towards all political elements, and by treating 
its enemies with far less severity than has been customary 
in the past has given them little excuse for rebellion. 
The so-called parties of today have become little more 
than groups of professional office-seekers, without pro- 

^ For a more complete discussion of the Washington Conference, see 
Chapter X. 



OF CENTRAL AMERICA 125 

grams or permanent organizations. While many of the 
causes of discord at home have thus been removed, the 
external influences which have hitherto made stable 
government impossible have lost much of their importance 
in the last four years. The other governments have 
been prevented from encouraging or allowing the prepa- 
ration in their territory of revolutionary expeditions 
against Honduras, or from intervening themselves in 
ihe internal affairs of their neighbor, by the attitude of 
the United States. The decisive intervention of that 
Republic in the last revolution in Nicaragua and the 
intimation, by a timely show of force, when outbreaks 
were threatened elsewhere, that similar action might be 
taken if it proved necessary, have had a salutary effect 
on potential revolutionists in all of the states of the 
Isthmus, for there are few Central American political 
leaders who desire to see the events of 1912 repeated 
in their own countries. 

The government of Honduras has always been and 
is today a military despotism where all branches of the 
administration are under the absolute control of the 
president. Graft and favoritism are as much in evi- 
dence as in the neighboring countries, and the public 
offices, occupied exclusively by the friends of those in 
power, are swept clean and refiUed after each successful 
revolution. Nevertheless, the country has had a series 
of able and patriotic presidents, who have done what 
they could, with the scanty resources at their command 
and in the face of very great difficulties, to encourage 
agriculture and commerce. Very real progress has been 
made in the field of education, and recently in the build- 
ing of roads, and that more has not been accomplished 
has been due to the poverty of the national treasury, 
the waste of revenues by civil wars, and the deep- 
ingrained practice of graft in the pubhc offices, rather 
than to any lack of progressive spirit. The idea of en- 
riching themselves at the expense of the public is so much 



126 THE FIVE REPUBLICS 

a part of the creed of the professional politicians who 
form the bulk of each party and the backbone of the 
revolutions to which each successive government owes 
its existence that it is impossible even for a president of 
the highest civic ideals to devote the entire resources of 
the government to internal improvements. 

The effects of the disorder and misrule from which 
the Republic has suffered for nearly a century are most 
clearly evident in the southern departments and the 
interior, which are the home of the majority of the 
people. The mines, in which many of the inhabitants 
of the province had been employed in colonial times, 
were abandoned soon after the declaration of independ- 
ence, and those who were dependent upon them were 
left to make a living as best they could. A large number 
joined the factional armies, which were hardly disbanded 
during the lifetime of the Central American Federation. 
Others turned their attention to agriculture or cattle 
raising, but did little more than secure a bare sub- 
sistence, working under a great disadvantage because 
of the impossibihty of transporting their products to a 
market, and constantly facing ruin from the visits of 
revolutionary armies. Those who tilled the soil confined 
themselves to producing small amounts of corn, beans, 
and sugar from year to year for their own consumption. 
Conditions were more unfavorable for the establishment 
of large plantations than they had been in the other 
countries, because revolutions were more continuous and 
more destructive, and because there was in Honduras 
comparatively little land suitable for the cultivation of 
coffee, indigo, or sugar for export. The raising of cattle, 
which might otherwise have been carried on under very 
favorable conditions, especially in the open, grassy 
valleys of the Olancho, was made all but impossible by 
the civil wars, for no one suffers more from the passing 
of a Central American army than the herdsman. There 
are indeed many ranches in the interior and on the South 



OF CENTRAL AMERICA 127 

Coast at present, but they are run carelessly and with 
primitive methods. The owners, who have lost a large 
part of their stock time after time by military requisi- 
tions or by confiscation, make no effort to introduce 
animals of a better breed from abroad or to give their 
cattle more than the most elementary care, leaving the 
herds to wander in an almost wild state over great 
stretches of land, and only interesting themselves in 
them when they have occasion to drive a few hundred 
head to market. A slight change in this respect is 
even now noticeable, however, for some of the land- 
owners are beginning to pay more attention to the 
welfare of their stock and to fence in and otherwise 
improve their properties. If the Republic enjoys a 
few more years of peace, and if a better market can be 
provided abroad for live animals or beef, Honduras 
might easily become the most important cattle-raising 
country of the Isthmus. 

Many of the mines were reopened by promoters from 
the United States in the last quarter of the nineteenth 
century, but the majority were abandoned a few years 
later because of the decline of the price of silver, which 
was the chief product. At the present time there are a 
nimiber of companies and individuals extracting the 
precious metals on a small scale, but the only plant of 
real importance is that of the New York and Honduras 
Rosario Mining Company at San Juancito, near Teguci- 
galpa. The silver shipped by this one firm comprises 
almost the only important export of the southern de- 
partments, and nearly twenty-five per cent of the total 
exports of the Republic. There are very great unde- 
veloped mineral resources, and many new mines would 
doubtless be opened if the difficulty of transporting 
machinery into the interior, could be overcome, and if 
the political conditions of the Republic should be made 
sufficiently stable to encourage the investment of foreign 
capital. 



128 THE FIVE REPUBLICS 

One of the factors which has done most to retard 
the economic development of the country is the lack of 
means of communication. Tegucigalpa is now the only 
Central American capital which is not connected with 
at least one seaport by railway. Even ox-carts can 
be used only in a very few places in the interior, for the 
construction of roads between the principal centers of 
population has been more difficult than elsewhere in the 
Isthmus because of the greater distances to be traversed 
and the broken character of the country. The chief 
towns of the Republic are scattered from the Guate- 
malan to the Nicaraguan frontier and from the North 
Coast to the South, and the mountain ranges between 
them, although not so high as in the neighboring coun- 
tries, are often so sharp and rugged that they are 
difficult to cross even on mule back. As has already 
been said, moreover, the expenditure of the energies 
of the people and the financial resources of the govern- 
ment on civil war has made it impossible to devote much 
attention to internal improvements. Transportation be- 
tween the different sections, therefore, is principally by 
rough mule trails, but there is nevertheless one splendid 
highway, from Tegucigalpa to San Lorenzo on the 
Gulf of Fonseca, which has no equal in Central America. 
The regular services of motor cars and trucks on this 
route have greatly reduced the difficulty of transporting 
freight and passengers between the capital and its port 
of entry at Amapala, although the rates charged are 
exceedingly high, even as compared with those charged 
on Central American railways.^ Similar roads are now 
being constructed, very slowly, from Tegucigalpa to 
Comayagua and to the Olancho, but they are so ex- 
pensive to build and to maintain that it seems likely 
to be many years before those sections of the country 

^ The rates charged are equivalent to $10 in gold for each passenger, 
and $1.20 to $1.60 per hundred pounds for freight. The distance is 
eighty-one miles. 



OF CENTRAL AMERICA 129 

will enjoy communication by automobile with the 
capital. 

Tegucigalpa, with the nearby municipality of Coma- 
yagiiela, is a prosperous little town, with a thriving 
commerce and many families of wealth and culture, but 
outside of the capital, if we except half a dozen foreign 
settlements on the North Coast, there are few places 
which show any signs of contact with modern civilization. 
The majority of the people reside in the provincial 
cities, which are decayed villages of from three to five 
thousand inhabitants, or in still more desolate smaller 
settlements. There are also thousands of famihes scat- 
tered through the mountains, living in thatched ranchos, 
and subsisting almost entirely on the produce from their 
cornfields and plantain patches. Even the more im- 
portant towns are almost entirely isolated economically 
and socially. A small amount of internal commerce is 
carried on by means of mule trains, and the mails are 
carried to almost all of the towns and villages with 
tolerable frequency and regularity, but the great mass 
of the people have little interest in anything outside of 
the community in which they live, and little conception 
of a world beyond the boundaries of their own country. 

It is not surprising that people living imder such 
conditions should have advanced little in civilization 
beyond their savage ancestors. Even those who might 
have risen above their environment, had they had the 
opportunity, have been kept down by almost insuperable 
obstacles. There is no incentive to improve agricultural 
properties, or to lay up a store of products for possible 
future needs, when all that a man has is hkely to be 
taken from him at any time, and there is no object in 
raising more produce than is required for the support 
of the farmer's family when there is no market in 
which it can be sold or exchanged for other goods. It 
is dangerous and expensive to transport products from 
one part of the country to another where they may be 



130 THE FIVE REPUBLICS 

needed, and there are few articles which the peasant can 
purchase when he does secure ready money. Little is 
manufactured in the country, and imports from abroad, 
by the time they have borne the heavy freights from 
North America and Europe via Panama to Amapala, 
the exorbitant charges of boatmen, brokers, and cus- 
toms officials at that port, and the expense of trans- 
porting them into the interior, are beyond the reach 
of any but the rich. In the interior, one may ride in 
some places for days without passing a place where 
articles manufactured abroad can be bought, and those 
commercial establishments which do exist, outside of 
Tegucigalpa, carry only the most inferior textiles, 
machetes, and other necessities, together with a few 
very cheap articles of personal adornment, at prices 
from three to five times those which would be demanded 
for the same things in the United States. 

Such conditions have inevitably condemned the people 
to a hand-to-mouth existence, which has eradicated all 
tendency to thrift. Improvidence, which seems to be 
an inborn characteristic of the Spanish-Negro-Indian 
population, has been encouraged by the ease with which 
the corn and beans necessary to support even a large 
family can be produced, for there is an abundance of 
unoccupied land in most parts of the country which can 
be cultivated with little labor by the primitive methods 
in vogue, and which will usually produce at least two 
crops each year. It would seem, therefore, that the 
people should lead an easy, if not an interesting exist- 
ence, but the very conditions which have made it possible 
for them to secure a living with little difficulty have 
contributed to make them in some ways the poorest and 
most miserable of the ladino populations of the Isthmus. 
Unaccustomed to hard work or to taking thought for 
the future, they rarely plant more corn during the rainy 
season than is barely necessary to last them through the 
dry months, so that a drought or other mishap to their 



OF CENTRAL AMERICA 131 

crops causes widespread want and suffering, aggravated 
by the difficulty of bringing food from other parts of 
the country where it may be abundant. There is no 
other inhabited part of Central America where the 
traveler finds it so hard to secure provender for himself 
and his mule as he does in most parts of Honduras 
during April and May. 

As might be supposed, the people are densely ignor- 
ant and unprogressive. Schools have been established 
in many of the towns and villages, but the percentage 
of illiteracy in the community as a whole seems to be 
very high. Religion is at a low ebb, although one 
section of the Republic, around Comayagua, seems to 
be the most fanatically Catholic portion of Central 
America. Outside of the larger towns, there are almost 
no priests, and the people, although superstitious, pay 
little attention to the precepts of the Church. It must 
not be supposed, however, that the Honduraneans are 
necessarily inferior, intellectually or physically, to the 
inhabitants of the other republics. They are naturally 
quick and intelligent, and they are said to be as ef- 
ficient laborers as any of the other Central Americans. 
Foreign mining corporations in all parts of the Isthmus 
prefer them to the inhabitants of any of the other 
countries as workmen, not only because of their greater 
skill, but because of their comparative trustworthiness. 
There is every prospect that they will advance rapidly 
in civilization when their country is brought into closer 
contact with the outside world. 

The economic backwardness of the country, which 
is in itself an effect of the civil wars, is at the same 
time one of their causes. The great majority of the 
people have little to lose by internal disorders, for 
there are few who own more than a cheaply constructed 
adobe house and a small corn patch. They welcome 
a revolution, with its opportunity for plunder and for 
living at someone else's expense, as an agreeable change 



132 THE FIVE REPUBLICS 

from the monotony of their lives and an opportunity 
temporarily to improve their condition. Among the 
upper classes in the cities, many of whom devote them- 
selves to politics rather than to more useful occupations 
because neither large scale agricultural or commercial 
enterprises nor the learned professions afford a secure 
income, there is always a large number of discontented 
office-seekers, ready to engage in any kind of intrigue 
which offers an opportunity to make a living at the 
public's expense. The organization of a revolutionary 
conspiracy is thus an easy matter, and the raising of 
an army among the common people is hardly more 
difficult. Money and arms are secured from foreign 
corporations which desire special favors, and material 
and moral support can almost always be obtained from 
one of the other Central American governments. With 
so many circumstances in their favor, it is not remark- 
able that the party leaders have been able time after 
time to plunge the country into civil war, sacrificing 
its welfare to their own ambitions and rivalries, and 
frustrating the efforts made by their more patriotic 
and far-sighted fellow-citizens to improve their country's 
economic and social conditions. 

Although at least eighty per cent of her people live 
in the central and southern departments, the most im- 
portant portion of Honduras, from the point of view 
of the outside world, is the long coast line on the Carib- 
bean Sea. This region is not only more productive 
than other parts of the Republic, because of its fertile 
soil and heavy rainfall, but it also has the immense 
advantage of being close to the Gulf ports of the United 
States, with which it is in regular communication by 
means of several lines of fast steamers. In recent 
years, its agricultural possibilities have been developed 
on a large scale by immigrants and capital from that 
country. Its ports, where English is the language 
most generally used and American influence is pre- 



OF CENTRAL AMERICA 133 

dominant, have become prosperous commercial towns, 
and one of them. La Ceiba, is the most important city 
in the Repubhc, after Tegucigalpa, and has more foreign 
commerce than all of the interior districts together. 

The native element on the Coast is somewhat larger 
than in the similar sections of Guatemala and Costa 
Rica, because the government has opposed certain legal 
obstacles to the free immigration of West Indian 
negroes. This policy has enabled other sections to 
profit to some degree from the prosperity of the banana 
farms, because many laborers from the interior spend 
longer or shorter periods working there, earning wages 
far greater than they could secure at home. There is 
little commercial intercourse between the two sections 
of the country, however, as the roads which unite them 
are not suitable to any traffic other than pack and saddle 
mules. Travelers frequently make the journey from the 
United States to Tegucigalpa by the overland route, 
and the mails are brought over regularly from the 
weekly steamers which touch at Puerto Cortez, but 
almost none of the exportations or importations of the 
interior are shipped through the Caribbean ports. The 
North Coast had until lately little political connection 
with the other departments of the Republic, but within 
the last few years the government has established civilian 
officials and military forces there, and has endeavored 
to strengthen the feeling of allegiance among its in- 
habitants. The people of the banana district, and 
especially the foreign residents, have played an im- 
portant part in recent revolutions, most of which have 
had one of the Caribbean ports as a base. 

The bananas which are the principal product of the 
coast are raised and exported by numerous small growers 
and by a few great fruit companies, each of which 
possesses its own line of steamers and controls the 
agriculture and commerce of the district in which it 
operates. These concerns, nominally independent and 



134 THE FIVE REPUBLICS 

competing, are generally supposed to be closely con- 
nected with, if not under the control of, the United 
Fruit Company, which itself has plantations and buys 
fruit at one or two places. The " United " has for 
some years been on unfriendly terms with the Hon- 
duranean government, and it is said that it prefers 
for this reason to operate through supposedly unrelated 
subsidiaries, which are in a better position than it could 
be to obtain concessions and privileges at Tegucigalpa. 
Most of these fruit companies have obtained concessions 
from the government under the terms of which they 
agree to build a railroad from the North Coast to some 
point in the interior, and receive in return the right 
to appropriate for their own use amounts of land varying 
from 250 to 500 hectares (that is, from 617.5 to 1,235 
acres) for every kilometer constructed along the main 
line and its branches. They are allowed to improve 
the ports to which their steamers sail and to build 
wharves for the use of which they charge a fee to other 
exporters. The object of the government in making 
these contracts has been to provide means of com- 
munication between the Atlantic ports and the interior 
towns, with the idea of extending the railroads eventually 
to the capital, but the fruit companies, interested merely 
in securing land suitable for the planting of bananas, 
have usually built only those sections of their lines 
which are in low, flat country, and when this has been 
accomplished have turned their attention to the con- 
struction of branches through districts of the same kind. 
Most of them are under obligations to extend the 
railways to the interior towns within a certain term of 
years, but the government seems so far to have been 
unable to find means to give effect to this part of the 
contracts. The desire to secure; railway communication 
between the capital and the North Coast has been so 
strong that valuable and far-reaching privileges have 
often been granted, with little consideration and with 



OF CENTRAL AMERICA 135 

no effective safeguards, to companies which have prom- 
ised more than they had any intention of carrying out; 
and other concessions, often actually prejudicial to the 
interests of the Republic, have been secured occasionally 
by foreigners who have aided revolutionary leaders in 
securing control of the government. Because of the 
lessons learned through many hard experiences with 
unscrupulous promoters, however, the native authorities 
are much more cautious of late about investigating the 
character and financial standing of persons applying to 
them for favors, and the majority of the contracts 
recently entered into have been more equitable in their 
terms and more explicit in their provisions than those 
of former years. 

The North Coast not only exports bananas, but also 
small quantities of lumber, cattle, rubber, and other 
products. Special concessions have been granted from 
time to time for cutting mahogany and cedar, providing 
usually that the government shall receive five dollars. 
United States currency, for every tree; and contracts 
have been made occasionally with foreigners for the 
development of other natural resources. Since the be-^1 
ginning of the European war many of the planters, 
who have been unable to export their bananas because 
of the withdrawal of the steamers which had hitherto 
carried them to the United States, have turned their at- 
tention to the breeding of cattle and hogs, which thrive on 
the otherwise useless fruit, and which are readily sold 
either in Honduras itself or in the neighboring countries. 
This new industry has saved many of the foreigners 
along the Coast from the ruin which in 1914 seemed 
inevitable, and there is every reason to suppose that 
it will become more and more important in the future. 

The commercial relations of Honduras with the out- 
side wor-ld are small as compared with some of the 
neighboring countries. The chief exports, and almost 
the only ones which reach large amounts, are the 



136 THE FIVE REPUBLICS 

bananas from the foreign-owned plantations on the 
North Coast and the silver from the one large mine 
already mentioned. The coffee crop, cultivated by 
primitive methods on small patches of ground, little 
more than suiRces to supply the local demand. Other 
products,— hides, lumber, cocoanuts, etc., — are shipped 
abroad in comparatively small amounts. The imports 
differ little in character from those of the other Central 
American countries. Their amount is small because the 
people have no crop which provides them with money 
for the purchase of foreign goods. The imports some- 
what exceed the exports at the present time because 
of the railway material and mining machinery which 
is being brought in by foreign investors, and because 
a certain amount of goods is undoubtedly being paid 
for every year under present conditions by the shipment 
abroad of silver coin. By far the largest part of the 
Republic's trade is with the United States, and more 
than half of it is carried on through the North Coast 
ports, which have regular steamer connection with New 
Orleans and Mobile. The interior and the South Coast, 
which have no outlet at the present time except through 
Amapala, have few exports, and can buy little from 
foreign countries because of their poverty and because 
the expense of transporting goods from Amapala to 
the capital and from there to the interior towns is so 
great that most imported articles are far beyond the 
reach of the mass of the people. 

In spite of the poverty which characterizes Hon- 
duras today, her future is not necessarily less promising 
than that of other parts of Central America. Her 
people are not backward because they are degenerate, 
but because they have been prevented from developing 
the natural resources of their country by the lack of 
means of transportation and by continual civil war. 
As has already been stated, they are by no means 
lacking in intelhgence or abihty. The country itself. 



OF CENTRAL AMERICA 137 

perhaps, does not enjoy the natural advantages which 
have brought about the prosperity of some of its coffee- 
growing neighbors, but it nevertheless possesses great 
fertile tracts which are as yet hardly explored, and 
great undeveloped mineral resources, which will be 
opened to the world by the building of railways and 
the investment of foreign capital, if the present era 
of peace continues. There is no section of the Isthmus 
more favorably situated for banana growing, for cattle 
raising, or for mining than are the northern depart- 
ments of Honduras. The Caribbean Coast, and the 
great plains and open valleys tributary to its ports, 
which are already more important commercially than 
the older settlements of the interior and the southern 
departments, seem likely in the near future to become 
the home of the larger portion of the RepubHc's inhabi- 
tants. If this occurs, and if the railways already under 
construction are extended through this region into the 
interior, there will be no other country of Central 
America so easily accessible from the United States 
and Europe, and none which should enjoy closer com- 
mercial and cultural relations with the outside world. 



CHAPTER VII 
COSTA mCA 

Concentration of the Population in One Small District — Predominance 
of Spanish Blood — Social Conditions Resulting from Absence of Indian 
Laborers — Political Tranquillity — History — Character of the Government To- 
day — Foreign Commerce and Means of Transportation. 

Although the territory of Costa Rica is approxi- 
mately 23,000 square miles in area, nearly all of her 
four hundred thousand inhabitants, with the exception 
of some small groups of Indians and negroes who take 
no part in the political life of the country, live on one 
small plateau, from three to four thousand feet above 
sea level, surrounded by the volcanoes and ranges of 
the Central American cordillera. The population is so 
dense in this meseta central, as it is called, that it is seldom 
possible to walk more than a few minutes without 
passing a house. San Jose, Cartago, Heredia, and 
Alajuela, the four principal cities, are connected with 
one another by a single cart road less than thirty miles 
in length, and few of the smaller towns and villages are 
more than a day's walk from the capital. Almost every 
acre, in the valley and on the sides of the mountaihs, 
is used for agricultural purposes. The people have never 
shown any inclination to expand into the mountainous 
country to the southward, where communication with the 
towns would be rather difficult, or into the hot and in- 
salubrious regions on the coasts. The Atlantic seaboard, 
as in the other Central American countries, is given over 
to banana plantations, owned and worked by foreigners; 
and the provinces bordering on the Pacific are sparsely 
inhabited by an unprogressive race who are largely of 
Indian descent. Both of these districts, because of 

138 



REPUBLICS OF CENTRAL AMERICA 139 

their products, are of importance economically, but the 
social and political life of the country has its center in 
the cool and fertile meseta central. 

Here there has grown up a nation which is entirely 
different from any of the other Central American 
republics. The Spanish pioneers who founded the city 
of Cartago in the latter part of the sixteenth century 
were unable from the outset to establish a colony similar 
to those in other parts of the Isthmus, because there 
was no dense agricultural population to be divided up 
as laborers among the settlers. Elsewhere the Indians, 
already living in large towns and devoting themselves 
to agriculture, had been forced with surprisingly little 
difficulty to work for their new masters; but in Costa 
Rica there were only a few scattered tribes, in a low 
stage of civilization, who cultivated the soil in a rude 
way simply to supplement their natural food supply 
obtained by hunting. Unaccustomed to steady labor, 
they were not promising material for a serf class like 
that existing at the time in Guatemala and Nicaragua. 
The settlers nevertheless introduced the repartimiento 
system immediately after their arrival in their new 
home, notwithstanding the royal order forbidding 
further enslavement of the Indians, and they are said 
to have treated those natives who were within reach 
with even greater cruelty than had been practiced in the 
other colonies.^ In consequence of this oppression, the 
numbers of the aborigines decreased very rapidly, and 
the settlers found themselves forced more and more 
to do their own work, in spite of their efforts to replenish 
the supply of slaves with war captives from Talamanca 
and other unsubjugated districts. Indian labor seems 
never to have been a considerable factor in the economic 
life of the country. 

At the present time there are few remnants of the 

' See L. Ferndndez, Historia de Costa Rica durante la Dominacidn 
Espanola. 



140 THE FIVE REPUBLICS 

aboriginal tribes in the interior, although Indian blood 
is still very evident in the people of Guanacaste and 
other outlying districts. The inhabitants of the central 
plateau are distinctly Spanish in race and civilization. 
The white famihes, moreover, do not seem to be of the 
same type as those of Guatemala and the other coun- 
tries. The majority of the people of Costa Rica, it is 
commonly said, are descended from Gallegos, one of 
the most law-abiding and hard-working of the numerous 
races that occupy the Iberian Peninsula, while those of 
the other countries are predominantly Andalusian. 
However this may be, the traveler cannot avoid noticing 
a certain dissimilarity in appearance and in customs 
and personal traits, between the prominent famihes of 
San Jose and those of other Central American capitals. 
The absence of a large Indian population had an 
economic and social effect which can hardly be exagger- 
ated. The unfortunate settlers of Costa Rica, through- 
out the colonial period, were in a condition which caused 
them to be pitied by all of their neighbors. Instead of 
living in large towns, supported by tributes brought in 
by the Indians of their encomiendas, the majority of the 
Creoles found themselves forced to settle in the country, 
where each family raised by its own labor everything 
that it consumed. The harvests, as Governor Diego de 
la Haya reported in 1719, were gathered "with the 
personal labor of the poor Spanish settlers, because of 
there being very few slaves in all the province."^ The 
colony was so poor that the name Costa Rica became 
a standing joke. Although there was plenty of food, 
clothes and other articles of European manufacture 
could be secured only with the greatest difficulty, be- 
cause there were no exports with which they could be 
purchased. The people were almost completely shut 
off from the outside world. As those who could do so 
left the country, and there was no immigration, the 

^ Quoted by Fernandez, o'p. cit. p. 316. 



OF CENTRAL AMERICA 141 

population grew very slowly. The little community 
was, however, spared the problems arising from the 
presence of a large class of laborers of another race, 
and the Spaniards, although they sank into a state of 
dense ignorance and were forced to adopt most primi- 
tive ways of living, acquired industrious habits which 
still distinguish them from their neighbors. Each 
settler cultivated a small amount of land, sufficient for 
the support of himself and his family, and was pre- 
vented from extending his holdings by his inability to 
employ laborers and by the fact that he had no market 
for his products. With the growth of the population, 
the entire meseta central eventually became occupied by 
little farms. There were a few wealthy and influential 
families, who had been given special privileges by the 
Spanish government, but they never occupied the domi- 
nant position which the aristocracy of Guatemala and 
Nicaragua had been able to assume, and the land which 
they held never amounted to more than a small portion 
of the cultivated area of the colony. 

In colonial times, a large part of the land belonged 
to municipalities rather than to individuals. As the 
population expanded, it became customary to give to 
the founders of each new village a tract of land to be 
held for the common use, part of it to be divided among 
the inhabitants from time to time according to their 
ability to cultivate it, and part to be held as pasture 
or forest. In 1841 President Brauho Carillo ordered 
that a large portion of these tierras ejidales should be- 
come the property of those who were at the time cul- 
tivating them. This decree was later annulled, but a 
similar law was passed in 1848, permitting the culti- 
vators to buy for a small price such parts of the common 
lands as they had fenced in and were using.^ These 
measures resulted in a great increase in the number of 
small holdings. 

' Costa Rica, Colecci&n de Leyes, VI, 133 ; IX, 453, 



142 THE FIVE REPUBLICS 

The large uncultivated tracts owned by the central 
government have been sold at low prices to anyone 
who wished to buy them, or have been given away as 
premiums to encourage the planting of coffee or cacao. 
Many persons acquired large estates in this manner, 
especially during the last years of the nineteenth cen- 
tury, and a class of large landholders has thus gradually 
grown up. These have in most cases converted their 
properties into coffee plantations or cattle ranches, but 
many large tracts have never been brought under cul- 
tivation, because their owners have lacked the enterprise 
and the capital to do so. When the quantity of public 
lands in the more accessible parts of the country began 
to grow small, attempts were made to check the reckless 
sale of them to persons who did not intend to turn them 
to account agriculturally, and to encourage their division 
into small holdings. The amount sold to any one pur- 
chaser was gradually reduced, and in 1909 a law was 
passed giving each head of a family the right to claim 
fifty hectares of government land, free of cost, provided 
that he actually settle upon it and cultivate it. The 
greater part of the more favorably situated districts, 
however, have now passed into private hands, and the 
people show little desire to undertake the conquest of 
the inaccessible country outside of the meseta central. 
The establishment of new plantations and the opening 
of means of communication require more money and a 
larger labor supply than the natives of the country can 
provide. For these reasons, the legislation intended to 
increase the amount of the Republic's territory used for 
agricultural purposes has not been very successful. 

Although there are now many large plantations scat- 
tered here and there through the country, the greater 
part of the meseta central is still divided into small 
farms. In the year 1906, there had been inscribed in 
the public land register 110,201 different properties, of 
which the average value was less than five hundred 



OF CENTRAL AMERICA 143 

dollars American gold.^ Even when allowance is made 
for the fact that there are many foreigners and rich 
natives, each of whom possesses a large number of 
separate properties, it is evident that an overwhelming 
proportion of Costa Rican families own their own homes. 
There is in fact practically no landless class, with the 
exception of a few thousands of laborers in the cities. 

The political development of this compact community 
of white peasants has necessarily been very different 
from that of the neighboring countries, where a small 
upper class of Spanish descent had ruled and exploited 
many times its number of ignorant Indians and half- 
breeds. In Costa Rica the fact that nearly all of the 
inhabitants were of the same stock and had inherited 
the same civilization has always made the country more 
democratic, and has forced the class which controlled 
the government to consider to some extent the wishes 
and interests of the masses. The development of the 
Republic, unhke that of its neighbors, has for this reason 
been toward rather than away from the realization of 
the republican ideals held by the framers of the first 
Central American constitutions. The small landholders 
have always exerted a strong influence on the side of 
peace and stable government, for they have rarely 
joined in attempted revolutions, and have shown them- 
selves incHned rather to take the part of the constituted 
authorities when disaffected politicians endeavored to 
plunge the country into civil war. Costa Rica has seen 
none of the protracted and bloody struggles which have 
darkened the history of the other repubhcs, for the 
violent changes of government which have occurred 
from time to time have been effected rather by military 
conspiracies in the capital than by campaigns in the 
field. 

The geographical situation of the Republic, moreover, 

* For thesre figures, I am indebted to the kindness of Mr. Manuel 
Aragdn, formerly director of the Costa Rican statistical office. 



144 THE FIVE REPUBLICS 

has enabled it to escape from the outside influences 
which until very recent years made the estabhshment 
of stable government almost impossible in other parts 
of Central America. At the southern extremity of the 
Isthmus, separated from its nearest neighbors by several 
days' travel through practically uninhabited territory, 
it has been able to hold aloof from the quarrels between 
the other republics, and has never been forced to submit 
to their intervention in its internal affairs. Costa Rica 
separated herself at an early date from the Central 
American Union, and has taken little part in the 
attempts for its restoration, for her statesmen have 
been unwilling to yoke their destinies with those of 
the turbulent communities north of them. 

During the first years of Central American inde- 
pendence, the war between the imperialist and repubh- 
can parties in other parts of the Isthmus had its counter- 
part in Costa Rica in a short struggle between Cartago 
and Heredia, which favored annexation to the Mexican 
Empire, and San Jose and Alajuela, which opposed 
it. The victory of the republicans led to the removal 
of the capital from Cartago to San Jose, where it has 
since remained. For nearly half a century the govern- 
ment was controlled by a few powerful families, among 
whom the most prominent were the Montealegres and 
the Moras, and the number of persons who participated 
in public affairs was very limited. The first president, 
Juan Mora, was successful in organizing a fairly ef- 
ficient administration and in promoting the almost non- 
existent commerce of the country, and Braulio Carillo, 
who took charge of the government in 1835, after two 
years of agitation and disorder, carried on the policy of 
his predecessor and laid the basis for the present pros- 
perity of the country by encouraging the production 
and exportation of coffee, which rapidly became the 
Republic's chief crop. He also definitely established 
the capital at San Jose, although to do so it was neces- 



OF CENTRAL AMERICA 145 

sary to put down an armed uprising by the other towns, 
which desired that the seat of the government should 
move from one place to another. Carillo was defeated 
for re-election in 1837, but he regained his position by 
a coup d'etat in 1838 and for four years exercised dicta- 
torial powers. During this period, the administration 
was reformed and made more centralized, the courts 
were reorganized and a penal code was drawn up, and 
Costa Rica's share of the debt incurred by the federal 
government was paid in full. Carillo was overthrown 
by a bloodless revolution in 1842, when Francisco 
Morazan, landing on the Pacific Coast, won over the 
chiefs of the army which the president sent against him, 
and occupied the capital. The victor had hardly reached 
San Jose when he began to raise troops and money for 
an attempt to re-establish the federal union, from the 
presidency of which he had recently been ejected by his 
enemies. Angered by this attempt to force them into 
a war of aggression on their neighbors, the people de- 
posed Morazan and put him to death. 

During the seven years which followed this revolution, 
continual quarrels between political factions and con- 
stant interference by the military leaders made it im- 
possible for any administration long to maintain itself 
in office. In 1849, however, with the election of Juan 
Rafael Mora, another era of stable government com- 
menced. The army was reduced to obedience, and order 
was restored throughout the Republic. During this ad- 
ministration, Costa Rica took the leading part in the 
war against Walker in Nicaragua. Mora was over- 
thrown in 1859 by a conspiracy in San Jose, and two 
military chiefs named Blanco and Salazar, who were 
allied to the Montealegre and Tinoco families, came 
into power. Through their influence, Jose Maria 
Montealegre was made president. Mora, who had 
attempted an unsuccessful counter revolution, was put 
to death, and the members of his family were exiled. 



146 THE FIVE REPUBLICS 

The severity of the government's action aroused much 
bitter feeling, but civil war was avoided by a com- 
promise, as the result of which Jesus Jimenez was 
elected president in 1863 and Jose Maria Castro in 
1866. The latter was deposed by a pronunciamento of 
Blanco and Salazar in 1868, and Jimenez, as first desig- 
nate, or vice-president, again took charge of the govern- 
ment. The new president made a determined effort 
to destroy the control which the army had been exer- 
cising over the administration, by removing Blanco 
and Salazar from their commands and forcing the other 
officers to obey the civil authorities. In doing this, 
however, he deprived the small group which had con- 
trolled the government for so many years of its chief 
support. 

Jimenez was deposed in 1870. A handful of men 
boldly entered the artillery barracks, concealed in an 
ox-cart under a load of fodder, and seized them, and 
with them the control of the city, almost without blood- 
shed. The leader of the revolution was Tomas Guardia, 
an army officer, who, unlike Blanco and Salazar, had 
little political connection with the great families. This 
man was the real ruler of Costa Rica from 1870 until 
his death in 1882, although he did not at once assume 
the presidency. His government was a repressive mili- 
tary dictatorship, in which his own personal followers 
held all of the principal offices. The great families, 
whose leaders were exiled and deprived of their property, 
were reduced almost to insignificance as a political 
factor, and have never entirely regained their former 
influence. Guardia was succeeded after his death by his 
close associate, Prospero Fernandez, who was at the time 
in command of the army. When the latter died in 

1885, his son-in-law, Bernardo Soto, took charge of 
the administration as first designate, and caused him- 
self to be elected president for the term beginning in 

1886. These two rulers did much to improve the ad- 



OF CENTRAL AMERICA 147 

ministration and the government finances, both of which 
Guardia had left badly disorganized. The administra- 
tion of Soto was especially notable because of the work 
of Mauro Fernandez, his Minister of Public Instruction, 
who for the first time estabhshed free and compulsory 
education throughout the Republic. The small group 
which had been in power, however, had made many 
enemies, among whom the most powerful were the 
clergy. The opposition grew so strong, as the election 
of 1889 approached, that Soto found himself unable to 
impose his own candidate on the nation without incurring 
serious danger of , revolution. He consequently allowed 
the first comparatively free and popular election which 
the Repubhc had ever known, in which Jose Joaquin 
Rodriguez, the candidate of the clerical party, was 
victorious. Many of the partisans of the government 
desired to retain control of the administration by the 
use of force, but they were prevented from doing so 
by the firmness of the president and by the attitude of 
the country people, who rose in arms and prepared 
to march on the capital to enforce the verdict which 
they had given at the polls. 

Rodriguez severely repressed all opposition, and 
governed during the greater part of his term without 
the aid of Congress. In 1894 he forced the legislature 
to elect his friend Rafael Yglesias to succeed him. 
During the latter's administration, the currency was 
reformed and placed on a gold basis, and the com- 
mercial and agricultural development of the country 
was promoted in many other ways. Yglesias was re- 
elected in 1898, but in 1902 he turned over the chief 
magistracy to Ascension Esquivel, who had been se- 
lected by a compromise between the government and 
its opponents. 

With the election of Esquivel began an era of 
republican and constitutional government which was 
unprecedented in the history of Central Amierica. Since 



148 THE FIVE REPUBLICS 

1902, the Republic has enjoyed an almost complete free- 
dom from internal disorder, with perfect liberty of the 
press, and genuine, if somewhat corrupt, elections. Cleto 
Gonzalez Viquez, who followed Esquivel in 1906, and 
Ricardo Jimenez, president from 1910 to 1914, were 
chosen by a majority of the voters in contests in which 
practically all of the adult male population of the 
Republic took part. Alfredo Gonzalez, Jimenez's suc- 
cessor, was placed in office by Congress in 1914, after 
no candidate had received a majority of the popular 
vote. The legality of his election was considered doubt- 
ful, but he remained at the head of the government 
until January, 1917. His advocacy of radical financial 
reforms, including a direct property tax and a heavy 
progressive income tax, aroused much hostility among 
the wealthy classes and alienated several of the more 
influential political leaders, with the result that he was 
overthrown by an almost bloodless golpe de cuartel 
engineered by Federico Tinoco, the Minister of War. 
The latter was formally elected president of the Re- 
public on April 1, 1917. Each of the recent rulers of 
Costa Rica has devoted himself with enlightened pa- 
triotism to promoting the welfare of the country, and 
great advances have been made in reorganizing the 
finances, in safeguarding the public health, and in pro- 
viding for the education of the masses of the people. 
The inhabitants of Costa Rica now enjoy more stable 
and more nearly democratic political institutions than 
any of their Central American neighbors. Constitu- 
tional government works in practice, and the letter 
of the law is generally respected, even though its spirit 
is often ingeniously circumvented. The president walks 
through the streets much like a private citizen, with- 
out fear of assassination or of being captured by his 
enemies, and the leaders of the opposition carry on 
their propaganda in San Jose without hindrance or 
persecution, and at times are even called in to consult 



/ 



OF CENTRAL AMERICA 149 

with the president on matters of great importance. The 
press criticises the administration fearlessly and at times 
scurrilously, and animated political discussions may be 
heard every day on the principal corner of the main 
street of the capital. The elections are participated in 
by about as large a proportion of the entire population 
as in the United States.^ If one candidate receives a 
majority of the votes cast, he becomes president, and 
if no absolute choice is made by the people, the question 
goes to the Congress, where it is decided by intrigues 
and deals between the political leaders. The adminis- 
tration is able to exert a decided influence in the selection 
of its successor through its control of the patronage 
and the army; but the final decision rests with the 
people or the popularly elected deputies, and it is not 
probable that any president would resort now to the 
forceful methods by which official candidates were placed 
in office a few decades ago. The only break in the 
peaceful development of constitutional government since 
1902 was the coup d'etat of 1917. That the dissatisfied 
party should have chosen violent means for obtaining 
control of the government, instead of waiting for the 
election which would have been held within a year, must 
be regretted by every friend of Costa Rica, but this very 
event nevertheless gave the people of the Republic an 
opportunity to show their capacity for self-government. 
Nothing could be more characteristic of Costa Rica than 
the whole-hearted co-operation of all political elements 
in the organization of the new administration, without 
either bloodshed or persecution. 

Government by the people, however, has not really 
advanced so far as the number of votes cast at the 
elections would seem to indicate, for the great majority 
of the Republic's inhabitants still take little interest in 
political affairs. So long as order is maintained and 

^ In the election of 1913, 64,056 votes were cast. The total population 
in that year was estimated at 410,981. 



150 THE FIVE REPUBLICS 

their property rights are secure, they do not care par- 
ticularly which group of politicians is in control and 
they are guided in voting more by the inducements held 
out by the rival candidates than by their judgments. 
Personalities rather than questions of national policy 
are the issue, for it is rarely that any candidate makes 
his campaign upon a definite political or economic plat- 
form. Between the elections, public opinion, although 
far more influential than in any of the other Central 
American countries, exercises httle real control over the 
policy of the government. The newspapers are very 
widely read, and the people as a whole are remarkably 
well informed about current events, but the press never- 
theless has comparatively little power, because no one 
believes in its impartiality or its incorruptibility. 

The choice of candidates for public office and the 
conduct of the government are left almost entirely to 
a small number of landed proprietors, lawyers, physi- 
cians, and professional pohticians residing in San Jose. 
These owe their influence partly to social position and 
wealth, but more especially to education; for although 
the members of the old principal families are still promi- 
nent, there are also many influential leaders who have 
risen from the lower classes by availing themselves of 
the educational advantages which the Republic offers 
to all its citizens. The ruling class is divided into a 
number of small political cliques, each of which pro- 
fesses allegiance to a party chief. As might be expected 
in an aristocracy composed chiefly of the leading people 
of a town of thirty thousand inhabitants, ties of blood 
and personal feeling play a very large part in the 
formation of these groups, especially as the prominent 
families are very large, and each is closely related with 
the others by intermarriage. A leader is often able 
to derive the major portion of his strength from his 
relatives alone, for the aid of ten or fifteen active and 
popular sons or sons-in-law, together with that of several 



OF CENTRAL AMERICA 151 

score of brothers and cousins and nephews, is not to be 
despised in a country where there are at most only a few 
hundred active pohticians. Besides his relatives and his 
intimate friends, however, each party chief has also a 
number of followers who are attached to him by the hope 
of obtaining employment in one of the government 
offices, for a very large nimiber of persons among the 
upper class have httle occupation aside from politics, and 
little income beyond that derived from official positions 
when their friends are in power. 

The various leaders may have different pohtical ideals 
and economic theories, which to some extent influence 
their relations to one another, but it can hardly be said 
that any of the present parties have definite principles 
or programs. Each desires primarily to win the elections 
in order to put its followers in office; and the platforms 
and the utterances of the leaders are shaped with this end 
in view, with the result that they receive little attention 
and less credence. When it is necessary in order to 
obtain control of the government, leaders of widely dif- 
ferent points of view will join forces without any sus- 
picion of inconsistency, and it is no very uncommon 
occurrence for a prominent member of one party to join 
another and very different group, because of a quarrel 
with his former associates or simply because the change 
improves his chances of advancement. Sectional jeal- 
ousy is no longer a force in poHtics, since the capital has 
so far outstripped the other towns in population and 
wealth, and rehgious questions are rarely injected into 
the campaign. Attempts have been made to organize 
a popular party among the laborers and peasants, and 
this party has achieved some notable successes at the 
polls, but its policy when in power is very similar to 
that of the other factions. There is in reality little ground 
for pohtical rivalry between the different classes of the 
population. 

The so-called parties have so little permanent organi- 



152 THE FIVE REPUBLICS 

zation that they can hardly be said to be in existence 
during the greater part of the presidential term. About 
a year before an election, the heads of the stronger 
groups, who are often perennial candidates, begin to 
organize their own followers, and to bargain for the 
support of the less powerful leaders, with a view to 
inaugurating their campaigns. Committees and clubs 
are organized in each town and village, and desperate 
efforts are made to secure the support of influential 
citizens who are not permanently affiliated with any 
party, and to arouse the interest of the voters in general. 
Processions and serenades are organized to show the 
popularity of each candidate, and orators are sent to 
every town and village on Sunday afternoons to enter- 
tain the voters with abuse and denunciation of the rival 
aspirants. Party newspapers are established, but they 
confine themselves to printing long lists of local com- 
mittees and adherents and to describing meetings and 
ovations. One may search their columns in vain for 
serious discussion of the issues of the campaign. Several 
of the regular newspapers take sides more or less openly, 
while others maintain an ostensible neutrality, but the 
press as a whole seems to have little influence over the 
voters. As the contest progresses, feeling runs higher 
and higher among the politicians, and the voters become 
first interested and then excited. The meetings and 
ovations, the continual political arguments on the streets, 
resulting in an occasional riot, and the wholesale treating 
by the party workers in the drink-shops, distract the 
attention of the people from their ordinary occupations, 
and temporarily disorganize the entire community. Elec- 
tions are therefore looked forward to with a certain 
amount of dread by the more respectable classes. 

Since the adoption of the law of 1913, the President, 
the members of Congress, and the municipal regidores 
have been chosen by direct popular vote instead of by 
electoral colleges. The balloting takes place on the same 



OF CENTRAL AMERICA 153 

day in all parts of the country. Each citizen must in- 
scribe his choice in a book where all may read it, and 
every party has representatives at the polls to secure 
fair play. This system prevents fraudulent counting, 
but it also encourages corruption and the exercise of 
improper influence on the individual elector. Bribery 
is practiced openly and on a large scale by all parties, 
and the voter is often prevented from exercising his own 
discretion in casting his ballot by the fear of offending 
the local authorities or other powerful personages in his 
village. The amount of intimidation and coercion, how- 
ever, is insignificant as compared with that in the other 
repubhcs, and attempts to influence voters by such means 
are generally condemned by pubHc opinion. The presi- 
dent is prevented by the constitution from seeking his 
own re-election, but one of his associates is usually 
frankly supported by the administration as the official 
candidate, and thus has an immense advantage over his 
opponents, even though recent presidents have refrained 
from using the army and the police to interfere with 
their enemies* campaigns or to keep the adherents of 
the opposition party away from the polls on election 
day. 

The large supplies of money which are perhaps the 
most important factor in the campaign are obtained by 
contributions from members of the party, who hope to 
obtain offices for themselves or their friends in the event 
of a victory, and from native and foreign business men 
who desire special concessions. The banks of San Jose 
usually assist one candidate actively though secretly, and 
considerable amounts are also obtained from certain rich 
speculators, in return for favors contingent on the elec- 
tion of the candidate whom they support. Consequently 
a new administration comes into office bound by numerous 
more or less improper pledges, and burdened by a con- 
siderable party debt. After the election of 1913-14, the 
victorious group liquidated a portion of its financial obli- 



154 THE FIVE REPUBLICS 

gations by a levy on all office-holders, who were pre- 
sumably the chief beneficiaries of the party triumph. 

The choice of the voters does not always inspire the 
respect which it would in a democracy more conscious 
of its power and more jealous of its rights. The people 
of Costa Rica have more than once shown that they 
were ready to compel respect for their will when their 
interests were at stake, but as a rule they are disposed 
to recognize any administration which controls the capi- 
tal, regarding civil war, with its attendant destruction 
of crops and livestock, as a greater evil than submission 
to an illegal government. It is not strange, therefore, 
that a defeated faction should occasionally attempt to 
seize the barracks in San Jose by force or by strategy, 
or that the president should exact conditions from an 
opponent victorious in an election before turning over to 
him the command of the military forces. No candidate 
opposed by the government has ever obtained the presi- 
dency without either making a compromise with his 
predecessor or else overcoming the latter's resistance 
by force, for even the freely elected presidents of the 
last decade have in every case had the approval, if not 
the active support, of the previous administration. The 
strength of the government, however, in reality rests far 
less upon the army than upon the disapproval of the 
people as a whole of any attempt to displace the con- 
stituted authorities in a disorderly manner, for the army 
itself is almost insignificant as a military force. There 
are a few troops in the barracks of the capital, but else- 
where order is maintained entirely by the civil pohce. 
It is a proud boast of the Costa Ricans that their gov- 
ernment employs more school teachers than soldiers. 

The President of the Republic has an almost absolute 
control over the machinery of the government. He not 
only appoints all administrative officers, but also in prac- 
tice exercises a dominant influence over the deliberations 
of the Congress, where his ministers initiate the most 



OF CENTRAL AMERICA 155 

important legislation. Even when his personal followers 
do not have a majority in the Chamber, he can usually 
command one by the use of patronage or of money from 
the treasury, which is often paid to the Deputies in the 
form of fees for professional services to the government. 
As party lines break down soon after an election, the 
minor pohtical leaders who make up the legislative body 
are apt to be influenced less by hostility to the adminis- 
tration than by a desire to maintain their following in 
their own districts by securing pubhc works for their 
towns and employment for their constituents. In times 
of emergency, moreover, the Congress itself frequently 
vests the President with practically absolute power, as it 
did when the country was passing through the economic 
crisis which followed the outbreak of the European 
war. 

The Judicial Department, however, is far more nearly 
independent of the Executive. The Supreme Court, 
which is elected by the Congress every four years during 
the pohtical slack season in the middle of the presidential 
term, appoints and removes all subordinate magistrates 
throughout the Republic. Politics enters very little into 
the composition of this body, partly because of the strong 
sentiment in favor of a non-partisan judiciary, and 
partly because party hues are almost non-existent at 
the time when the judges are chosen. The subordinate 
positions are also saved from the spoils system which 
rules in other departments of the government, although 
it is inevitable that purely personal considerations should 
enter to some extent into the appointments. The admin- 
istration of justice is on the whole prompt and efficient, 
although the magistrates are not always distinguished 
for erudition or ability and those on the supreme bench 
sometimes show a human desire to make sure of their 
re-election as the time for this draws near, by keeping 
on good terms with the President and with the members 
of Congress. They are generally honest and impartial 



156 THE FIVE REPUBLICS 

in their decisions, however, and their incorruptibility, with 
hardly any exceptions, is undoubted. That not only the 
people themselves but also the foreigners in the country 
have confidence in the courts is shown by the fact that 
there has been a conspicuous lack of the complaints of 
'denial of justice which have complicated the relations of 
some other Latin American republics. 

The local administration is highly centralized, but the 
people of each district enjoy a certain amount of local 
self-government through their municipahties. The rep- 
resentatives of the central government are the executive 
officers of these bodies,"^ and the Department of Gober- 
nacion has a final veto over all their acts, but the 
regidores are freely elected by the people of each town 
and village, and have very wide powers in matters of 
purely local interest. The lack of funds, however, aris- 
ing from the fact that the municipalities have no source 
of revenue except certain license fees and fees for pubhc 
services, forces them to leave to the central government 
many of the functions which are assigned to them by 
the constitution, and especially the support and direction 
of almost all the more costly pubhc works, and at the 
same time makes them politically subservient to the 
President and the Congress, which can provide or with- 
hold appropriations for local purposes. President 
Alfredo Gonzalez attempted to make the local units truly 
autonomous, by authorizing them, in the fiscal legislation 
passed just before his fall, to levy direct taxes upon 
their inhabitants by adding a percentage to the national 
direct taxes. 

The central government itself, thanks to a long period 
of internal peace and to the patriotism and abihty of 
the men who have been at its head, has reached a high 
degree of efficiency and of usefulness to the community. 

^ In this Costa Rica differs from the other republics, where the alcalde 
and the local representative of the central government are two distinct 
persons, theoretically independent of one another. 



OF CENTRAL AMERICA 157 

Private rights are generally well protected, and the 
oppression of private citizens by the officials, while not 
unknown, is unusual. The security of persons and prop- 
erty is guaranteed by a well-organized police force, a 
fairly efficient judiciary, and an excellent land registry 
system. In spite of the difficulties presented by the 
mountainous character of the country and by six months 
of heavy rains every year, the Republic possesses a fair 
system of highways, although in this matter there is still 
room for improvement. The government-owned and 
operated railway from San Jose to the Pacific Coast 
compares favorably, at least in the service rendered, with 
those controlled by foreign corporations in other parts 
of Central America. There are sewers in the larger 
towns, and aqueducts supply healthful drinking water 
even in the small villages. The public health is also pro- 
tected by a rigid quarantine service, by a veterinary 
service which inspects live cattle and meat, and by the 
regulation of contagious diseases and prostitution; and 
the government employs forty physicians in various parts 
of the country who treat the poor in their districts free 
of charge. Many of the public services, because of the 
lack of experience and training on the part of the officials, 
and because of the poverty of the government, are still 
in an unsatisfactory state, but they at least show an 
earnest desire on the part of the authorities to promote 
the welfare of the country. 

During the last three years, remarkable progress has 
been made in improving sanitary conditions. The cam- 
paign against the hookworm, inaugurated in 1914 with 
the aid of the International Health Conmiission of the 
Rockefeller Foundation, already promises to effect an 
incalculable change in the condition of the country people, 
an immense number of whom suffer from this disease. 
The representative of the International Health Commis- 
sion has been made the head of an official department 
under the Ministry of Police, and all local health officers 



158 THE FIVE REPUBLICS 

and police officials have been placed under his orders to 
assist him in the examination and treatment of patients 
and the execution of sanitary measures designed to check 
further spread of the disease. At the same time, he has 
been made Director of the School Medical Corps, in 
which capacity he has done much to secure proper care 
for the health of the children and to improve hygienic 
conditions in the schools. With the earnest co-operation 
of the government, notable results have been obtained 
even in the short time which has elapsed since the work 
was begun. It is impossible to estimate what the final 
effect of work such as this will be, for the extinction of 
the hookworm alone, to say nothing of the other results 
of the campaign of medical education and sanitary 
improvement which has been undertaken, cannot but 
have a lasting effect on the happiness of the people and 
on their capacity for labor. 

The field of activity in which the rulers of Costa Rica 
have perhaps shown the most interest has been that of 
education. Its school system gives the Republic one 
of its strongest claims to be ranked among the progres- 
sive communities of the world. The nation which a 
century ago was so illiterate that it was difficult to find 
enough men who could read and write to fill the public 
offices, now provides free and obligatory instruction for 
all of its citizens, with a primary school in every settle- 
ment where there are thirty children to attend it. In 
1915, there were 1,108 teachers and 34,703 children in 
the public schools.^ New buildings and equipment are 
being secured as fast as possible, and new courses of 
technical and agricultural training are being introduced 
everywhere. There are five institutions for the secondary 
education of both sexes, two in San Jose, and one each 
in Cartago, Heredia, and Alajuela, offering instruction 
similar to that given in American schools. These have 
somewhat over eight hundred students in all. The latter 

^ Costa Rica, Anuario Estadistico, 1915. 



OF CENTRAL AMERICA 159 

are chiefly from the middle classes in the towns, but the 
brighter children from the country schools are also 
encouraged and financially aided in continuing their edu- 
cation after they complete the primary course. A 
national normal school has recently been established in 
Heredia to provide teachers for the entire system. Be- 
sides the government institutions, there are schools of 
law, pharmacy, music, fine arts, textiles, agriculture, and 
domestic science, most of them in San Jose, which receive 
some aid from the treasury. How high the percentage 
of literacy is, is attested by the large circulation of news- 
papers in the country districts. 

An examination of the work of the government shows 
that the men who control the destinies of the Republic, 
however regrettable their political methods sometimes are, 
do not seek power solely for their own profit. If there 
is a large amount of favoritism and graft in official 
circles, there is also much progressive spirit and true 
patriotism. Most of the government employees are ap- 
pointed for political reasons, but they ordinarily perform 
their duties with as much energy and zeal as can be 
expected in tropical America. Public money is often 
misused, and improper considerations sometimes govern 
the letting of contracts, but public works are neverthe- 
less well executed. Wholesale theft from the treasury, 
which is too often regarded with cynical indifference in 
other parts of the Isthmus, would not be tolerated by 
public opinion in Costa Rica. 

Costa Rica's freedom from internal disorder has 
enabled her to attain a prosperity which has entirely 
transformed the backward and poverty-stricken com- 
munity of colonial days. In 1821, her people had almost 
no means of communication with the outside world. 
They produced nothing which they could export, and 
they were separated from either coast by several days 
of difficult and dangerous traveling. Commerce with the 
outside world, however, began soon after the declaration 



160 THE FIVE REPUBLICS 

of independence with the development of the growing 
of coffee, which was exported for the first time in 1835/ 
The importance of this crop increased rapidly, especially- 
after the construction of a cart road, which was com- 
pleted in 1846, to the Pacific port of Puntarenas. The 
Costa Rica berry soon acquired and still holds a high 
reputation in the European markets. 

The exporters at first encountered great difficulty and 
expense in shipping their product, which they had to 
send around Cape Horn, or later by the expensive route 
of the Panama Railway. The government, therefore, 
early endeavored to provide more adequate means of 
transportation. In 1871, work on a line from Puerto 
Limon pn the Caribbean Sea to the capital was begun 
by Mr. Minor C. Keith. After difficulties which seemed 
almost insuperable had been overcome and thousands of 
lives had been sacrificed in the deadly lowlands of the 
East Coast, through train service to San Jose was finally 
opened in 1890, and the Repubhc found itself for the 
first time in direct communication with the United States 
and Europe. The railway, which still carries the greater 
part of the imports and exports, was leased in 1905 for 
a period of ninety-five years to the Northern Railway 
of Costa Rica, a concern owned by the United Fruit 
Company. 

It was while building this road that Mr. Keith began 
to plant the banana farms which later developed into 
the enormous Caribbean properties of the United Fruit 
Company. Costa Rica still leads the Central American 
republics in the production of this fruit. Almost the 
entire East Coast has now been brought under cultiva- 
tion, and English-speaking communities of Americans 
and Jamaica negroes have grown up everywhere along 
the railroad and its numerous branches. In spite of the 
ravages of the disease which has attacked the older plan- 
tations, more than eleven million bunches of bananas were 

^ Bancroft, History of Central America, Vol. Ill, p. 653. 



OF CENTRAL AMERICA 161 

exported from Limon and its tributary ports in 1913/ — 
a quantity the immensity of which can only be grasped 
when we reahze that it would provide approximately 
a dozen bananas for every man, woman, and child in the 
United States. The Fruit Company is of course very 
powerful in this region, where even the police duties of 
the central government are to a great extent exercised 
through its agents. In the interior, the " United " has 
less influence. It has many friends as well as enemies 
among the party leaders, and it has not encountered so 
intense a spirit of jealousy and hostility towards foreign 
enterprises as is found in certain of the other republics; 
but whatever efforts it has made to influence the outcome 
of presidential and congressional elections, in order to 
be in a more advantageous position to ask concessions 
from the government, have usually been conspicuously 
unsuccessful. 

In addition to the Northern Railway, the Republic 
has another line, owned and operated by the government, 
from San Jose to Puntarenas on the Pacific Coast. This 
also was commenced during the administration of Gen- 
eral Guardia, but it was not completed until 1910. Being 
shorter and on the whole less expensive to operate than 
the Atlantic road, it should eventually become a for- 
midable competitor of the latter when adequate trans- 
portation is provided by way of the Panama Canal. 

In the last decade of the nineteenth century, when the 
price of coffee in the world's markets was high, the 
Republic enjoyed an era of great prosperity. The 
wealthier famihes were able to travel and to study 
abroad as they had never done before, and both society 
and the government entered on a period of extravagance, 
of which the magnificent national theater in San Jose 
is an enduring memorial. When the coffee prices fell, 
there was a reaction which checked the development of 
the country's natural resources. The area under culti- 

^ Costa Rica, Anuario Estadistico, 1913, p. xxxvii. 



162 THE FIVE REPUBLICS 

vation in the interior has now remained practically the 
same for many years, and the exports of coffee, which 
have declined in value, have increased little or not at all 
in quantity/ During this time, many of the more promi- 
nent native families have become impoverished, and the 
upper classes as a whole have hardly shown either the 
energy or the adaptabiUty necessary to maintain their 
political and economic leadership under modern condi- 
tions. They devote themselves to politics and to the 
learned professions, but there are now comparatively 
few of the wealthy landholders who form the most influ- 
ential class in the other Central American republics. 

Banking, commerce, and mining are almost entirely 
in the hands of foreigners, although the majority of the 
coffee plantations are still owned by citizens of the coun- 
try. These immigrants have identified themselves more 
completely with the community than in any of the other 
republics, often intermarrying with the . natives and 
taking a prominent part in local affairs. San Jose, 
although not so large or so wealthy as Guatemala or 
San Salvador, is more Hke a European city than any 
other capital in the Isthmus. 

The industrious, sturdily independent peasant class 
in the country districts has been httle affected by the 
changes which have taken place in the cities. Through- 

^ The annual exports of coffee averaged 13,478,941 kilos, valued at 
8,835,726 colones for the ten years 1891-1900; and 14,478,605 kilos, valued 
at 6,709,767 colones for the ten years 1901-1910. (Costa Rica, Besumenes 
Estadlsticos, 1883-1910.) 

The exportations in the years 1912-1915, according to the Anuario 
Estadiatico for 1913 and for 1915, were as follows: 

Value in 
Year. Kilos. colones. 

1912 12,237,875 7,623,561 

1913 13,019,059 7,752,750 

1914 17,717,068 10,028,731 

1915 12,206,357 8,022,166 

It should be noted that the value of the colon in 1915, and during a 
part of 1914, was approximately 20 per cent less than under normal 
conditions. 



OF CENTRAL AMERICA 163 

out the meseta central there are countless small farms, 
which not only supply their owners with corn, beans, and 
sugar cane for food, but at the same time frequently 
produce a small amount of coffee, which is sold to the 
proprietors of the large cleaning mills to be prepared 
for export. The farmers not only cultivate their own 
properties, but also work for several days in each week 
on the larger plantations. As wages are fairly high, 
they thus have a money income which enables them to 
live far better than their brothers in the neighboring 
countries. Most of them can read and write, and they 
are able to give their children educational advantages 
little inferior to those enjoyed by country people in any 
other part of the world. During the last few years, as 
we have seen, they have even acquired a not inconsid- 
erable political power, which wiU become more important 
as they become more experienced in its use. It is these 
small landholders who have made Costa Rica what she 
is today, and who offer the strongest guarantee for her 
future. 



CHAPTER VIII 

THE ESTABLISHMENT OF A CENTRAL 
AMERICAN FEDERATION 

strength of the Unionist Idea — Breakdown of the First Federation — 
Attempts to Establish a New Union — Obstacles to the Formation of such 
a Union at Present — Advantages which would be Derived from Federation — 
The Attitude of the United States. 

The ideal of uniting Central America under one 
government has been one of the strongest forces which 
have influenced internal politics and international rela- 
tions in the Isthmus from the declaration of independence 
down to the present day. Reahzing that the five coun- 
tries can never be really independent of one another, and 
that the interests of all would be best served by joining 
forces for their common ends, the majority of their 
statesmen have always been, and are today, perhaps 
more than ever, desirous of seeing them transformed 
from a group of small, disorderly republics into one 
strong nation, able to promote the interests of its people 
and to command respect from foreign powers. Such a 
nation, with its five millions of inhabitants, its fertile soil, 
and its great natural resources, would, they believe, be 
able to assume a position of importance in the councils of 
Latin America and to make great strides towards better 
government and towards a more complete realization 
of economic opportunities at home. In the last five 
years especially, increasing contact and occasional friction 
with other powers have drawn the five states closer 
together than ever before, for the problems created by 
the invasion of foreign financial interests and by the 
intervention of foreign governments in their internal 
affairs have made them reahze more than ever the dan- 
gers to which their divided condition and their quarrels 

164 



REPUBLICS OF CENTRAL AMERICA 165 

among themselves expose them. The pressure from out- 
side has given rise to a stronger sentiment of their com- 
mon nationality and to a fuller realization of the 
identity of their interests than could exist while they 
were still almost shut off from intercourse with other 
countries. 

There are many influences which make the relations 
between the five countries closer than those which ordi- 
narily exist between neighboring independent states. 
Their administrative union during the three centuries 
of Spanish rule and their entry together into the family 
of nations not only created a strong sentimental tie 
between them, but also gave rise to political problems 
common to them all, and to political parties which 
regarded not individual states but the Isthmus as a 
whole as their theater of activity. The factions which 
arose during the years of the Federation kept up an 
international organization after the dissolution of the 
central government, and Conservatives in Guatemala, 
or Liberals in Salvador and Nicaragua, interfered from 
time to time to promote the interests of their parties 
in other countries throughout the nineteenth century. 
Even at the present time, each state has too much interest 
in the internal affairs of its neighbors to remain indif- 
ferent when revolutions or other political changes occur. 
As a result of this situation, men of the same way of 
thinking have been brought into closer relations with one 
another, and have been made to feel, by their co-operation 
for common political ends, that they were, in fact, citizens 
of one Central American nation. This feeling has been 
strengthened by the custom of exiling the leaders of the 
defeated party after revolutions, which has encouraged 
travel from one country to another, and by the fact that 
many of the prominent families of the Isthmus are related 
to one another by intermarriage. The five republics, 
moreover, are all confronted with the same economic 
problems, in developing their natural resources, improv- 



166 THE FIVE REPUBLICS 

ing their agricultural methods, and securing capital for 
the construction of railroads and other public works ; and 
they have much in common in their civilization, and espe- 
cially in the customs and ways of thought of the upper 
classes, despite the wide divergences between them in 
racial and social conditions. 

In 1821, when the authority of Spain was thrown off, 
it was supposed as a matter of course that the provinces 
of what had been the Viceroyalty of Guatemala would 
continue to be united under one government. The Con- 
stituent Assembly which met after the dissolution of the 
short-lived union with Mexico was therefore following 
the logical course laid down for it by the history and 
the existing political organization of the five countries, 
as well as by the ideas of the political theorists among 
its members, when it adopted a constitution providing 
for a federal repubhc. The stormy history of the gov- 
ernment thus established has already been sketched. The 
Federation fell to pieces partly because of local jealousies 
and the conflicts of local interests, and partly because of 
faults in its constitution and weaknesses in its adminis- 
tration. The civil war which existed in almost all of the 
states, and the strife between the different departments 
of the central government itself, made it impossible for 
the latter to establish a constitutional regime or perma- 
nently to exercise any real power. The states, jealous 
of the control of their affairs from Guatemala, respected 
the orders of the federal authorities only when it suited 
their convenience to do so; and these authorities, in order 
to maintain their position, were forced to intervene in 
the internal affairs of the states to establish administra- 
tions subservient to their wishes. There was thus a series 
of revolutions and counter revolutions, until within a few 
years both the national and local governments had be- 
come mere despotisms which depended for support solely 
upon the federal army. It was impossible for a cen- 
tralized military regime to exist very long in a country 



OF CENTRAL AMERICA 167 

where means of communication between the different 
sections were so inadequate, and where the centrifugal 
forces were so strong as they were in the turbulent, 
mutually jealous communities of the Isthmus. The 
federal government had less and less real power after 
the first term of President Morazan, and in 1840 it dis- 
appeared entirely with the expulsion of its representatives 
from Central America. 

The disastrous failure of the federal republic convinced 
many of the statesmen of the Isthmus that their countries 
would be better off as separate states. This feeling was 
especially strong among the Conservatives in Guatemala, 
who for more than thirty years were the greatest obstacle 
to the restoration of the Union, The great families' oppo- 
sition to a political connection vnth. the other states seems 
to have arisen from the memory of the expense to which 
they had been put in supporting the federal authorities 
before 1829, and of their sufferings at the hands of the 
Liberals from Honduras and Salvador, who overwhelmed 
and subjugated them in that year. Costa Rica, at the 
other extreme of the Isthmus, had also withdrawn for- 
mally from the Federation, inspired by motives much 
similar to those which actuated Guatemala. Unlike the 
latter country, however, she was able because of her 
isolated position to remain entirely aloof from the politi- 
cal struggles elsewhere, and only on one or two occasions 
was forced to take notice of the agitation to which the 
activities of the Unionist party periodically gave rise. 

Salvador, Nicaragua, and Honduras, on the other 
hand, refused to accept the dissolution of the first union 
as a final settlement of the relation of the states to one 
another. Many of the leaders in those countries had 
taken part in the defeat of Morazan, but they had done 
so from personal hostihty to the federal president rather 
than from a desire for the destruction of the federal 
government. The restoration of the Union was cham- 
pioned by the Liberal party, but it was also favored by 



168 THE FIVE REPUBLICS 

many of the Conservatives, despite the influence exerted 
upon the latter by their allies in Guatemala. There were 
a number of factors which tended to draw the three 
central republics together. With their mestizo popula- 
tion, they resembled one another in their economic and 
social conditions far more than they resembled Guate- 
mala, with its primitive Indian tribes, on the one hand, 
or white Costa Rica on the other; and thus no one of 
them was influenced, as were those countries, by a con- 
sciousness that its internal problems were entirely dif- 
ferent from those of its neighbors. Furthermore, their 
jealousy of the superior power of Guatemala, and the 
alarm caused by Carrera's repeated interventions in their 
affairs during his dictatorship in that country, greatly 
strengthened their desire to unite their forces for pur- 
poses of mutual defense. Great Britain's aggressions 
on the East Coast of Nicaragua and Honduras had the 
same result after 1848. Between 1840 and the invasion 
of Nicaragua by Walker in 1854, hardly a year passed 
without the meeting of a congress to discuss plans for 
forming a union, at least between these three countries. 
As a rule these congresses adjourned without achieving 
any definite result, finding their work made hopeless by 
the intrigues of the separatist party in Guatemala and 
by the mutual mistrust of the participating states, but 
twice a federal government in which neither Guatemala 
nor Costa Rica was represented was actually established. 
A third attempt to unite the central republics was made 
forty years later, at the end of the nineteenth century. 

The history of these abortive imions affords an instruc- 
tive illustration of the influences which have kept the 
five states apart. In 1842, delegates from Salvador, 
Honduras, and Nicaragua met at Chinandega, in the 
last named republic, and adopted a treaty providing not 
so much for a central government as for a confederation, 
in which each state was left free to manage its own 
affairs, even to the extent of carrying on diplomatic 



OF CENTRAL AMERICA 169 

relations and making war. The only common authority- 
was a council, consisting of one delegate from each 
republic and presided over by a Supreme Delegate, and 
a supreme court chosen by the state legislatures. This 
government sent troops to aid Salvador in a war between 
that country and Guatemala in 1844, and finally suc- 
ceeded in bringing the war to an end through the media- 
tion of Frutos Chamorro, the Supreme Delegate. The 
confederation came to an abrupt and disastrous end in 
the same year, however, when Salvador and Honduras 
attacked Nicaragua because the latter had granted asy- 
lum to political exiles from these countries.^ 

In 1849, the central republics again signed a treaty 
of confederation which provided for common action in 
foreign affairs and a union for purposes of defense. 
Their action was inspired by the encroachment of Great 
Britain on the territory of Nicaragua and Honduras 
on the Mosquito Coast. The council of commissioners 
to which the management of the affairs of the confed- 
eration was intrusted accomplished little; but in 1852, 
in the face of renewed foreign complications, a diet met 
at Tegucigalpa to make the union between the three 
countries closer and to establish, if possible, a real federal 
government. The diet elected a president, and adopted 
a constitution giving that official power, not only to rep- 
resent the three republics in their dealings with foreign 
powers, but also to intervene by force in the internal 
affairs of the states, when it was necessary to maintain 
order. Disapproving of this provision, Salvador and 
Nicaragua refused to ratify the constitution, and the 
diet dissolved.^ 

Although the Conservatives of the central republics 
had been less hostile to the restoration of the federation 

^See Bancroft, History of Central America, Vol. Ill, p. 188ff., and A. 
G6mez Carillo, Compendia de la Historia de la America Central, pp. 219, 
304-305. 

2Bancroft, III, p. 209; Gomez C. pp. 306-307; J. D. Gdmez Historia de 
Nicaragua, 575. 



170 THE FIVE REPUBLICS 

than were the great families of Guatemala, they took 
little interest in plans for a union after these two failures. 
During their thirty years' rule in Nicaragua, therefore, 
that country did not enter into another attempt to accom- 
phsh what was regarded as primarily the ideal of the 
opposite party. With Salvador and Costa Kica, in fact, 
it opposed and defeated the projects of Rufino Barrios 
in 1885. It was not until the accession of President 
Zelaya that the Nicaraguan government again showed 
itself ready to enter into projects for the restoration of 
the federation. In 1895, the representatives of the three 
central republics, meeting at Amapala, drew up a treaty 
establishing a diet, composed of one member from each 
country, to which was intrusted the conduct of their 
relations with one another and with other nations. This 
body was to elaborate a definite plan for a closer, per- 
manent union.^ The federation assumed the name 
" Greater Republic of Central America," and at once 
took steps to enter into diplomatic relations with the 
powers.^ During the next two years a constitution was 
drawn up, and in the autumn of 1898 an executive 
council, with far broader powers than the old diet, was 
installed in Amapala. It had scarcely assembled, how- 
ever, when the party opposed to the union in Salvador 
overthrew the government of that state, and declared the 
federation at an end. The council called upon the presi- 
dents of Nicaragua and Honduras to send troops to 
uphold its authority, but neither executive was willing 
to make war upon the new government of Salvador. 
The union was consequently dissolved.^ 

The failure of the federations created by the treaties 
of 1842, 1849, and 1895 did not indicate that a real union 
of the five countries would be impracticable, because a 

^ For the text of this treaty, see U. S. Foreign Relations, 1896, p. 390. 
^ President Cleveland recognized the Greater Republic on Dec. 24, 1896. 
Ibid, p. 369. 

' Ibid., 1898, p. 172; G6mez C. of. cit. p. 310. 



OF CENTRAL AMERICA 171 

real union was not attempted. The political leaders who 
were in control in Salvador, Honduras, and Nicaragua 
theoretically favored the establishment of a central gov- 
ernment, but they were loath to surrender to it any real 
power or to confer upon it any right of control over 
themselves. They insisted upon keeping the management 
of the state armies, finances, and administrative machin- 
ery in their own hands, and they therefore conferred 
upon the federal officials only an indefinite authority, 
backed by no military force, which they respected and 
supported only so long and in so far as it suited their own 
interests to do so. The unions thus established were not 
nations, but mere leagues of independent states. Each 
came to an inglorious end as soon as the rapid changes 
of Central American politics brought to the front in one 
of the states an admmistration which was not in sym- 
pathy with the men who controlled the central govern- 
ment. 

The apparent impossibihty of restoring the federation 
by the voluntary action of the five republics convinced 
many of the strongest advocates of a union that their 
ideal could be realized only by the use of force. It was 
this belief which led Rufino Barrios, the first great 
Liberal president of Guatemala, to embark on the disas- 
trous adventure which caused his death. Soon after his 
accession to power, Barrios endeavored to persuade the 
presidents of the other republics to agree to some form 
of federation. The latter declined to enter into any 
definite treaty, although negotiations upon the subject 
were carried on intermittently for several years. The 
United States, when invited to participate in these efforts, 
declined to interfere, although warmly approving the 
plan for a union.^ The equivocal attitude of his neigh- 
bors, and their refusal either to agree to or to reject 
his proposals, finally convinced Barrios that the people 
of the Isthmus favored his plans, but that the govern- 

^ See U. S. Foreign Relations for 1881 and following years. 



172 THE FIVE REPUBLICS 

ments would consent only if they were compelled to. 
On February 28, 1885, therefore, he announced that he 
had assumed command of the military forces of the Cen- 
tral American Federation, and invited the other states 
to recognize the new government, and to send delegates 
to a constituent assembly which was to meet in Guate- 
mala City in May of the same year. Honduras expressed 
approval of his action and placed troops at his disposal, 
but all of the other countries of the Isthmus at once 
began to raise armies to defend their independence. 
President Zaldivar of Salvador, upon whose aid Barrios 
had confidently counted, yielded to the popular demand 
for resistance to the aggression of that repubhc's tradi- 
tional enemy, and sent an army which defeated the forces 
of Guatemala at Chalchuapa, on April 2, 1885. The 
death of Barrios in this battle disheartened his followers, 
and put an end to a war which could not have failed to 
have involved every section of the Isthmus if it had 
continued. 

An ambition to place himself at the head of a restored 
Central American nation has influenced more than one 
Central American president in his dealings with the 
neighboring countries. Few have actually gone so far 
as Barrios did, but the same idea which inspired the 
Guatemalan leader has often influenced powerful rulers 
to intervene openly or covertly in the internal affairs of 
the other states, and has thus frequently been a cause 
of revolutions and international wars. The most recent 
attempt to unite the five countries by force was made in 
1907. In that year President Zelaya of Nicaragua 
overthrew the government of President Bonilla in Hon- 
duras, and set up a new one, under Miguel Davila, which 
was practically controlled by himself. He then pro- 
ceeded to attack Salvador, inspired by the idea of estab- 
lishing a Central American union, — an idea which, as 
he said, was at the time being advocated with enthusiasm 
by the press of Central America, the United States, and 



OF CENTRAL AMERICA 173 

Mexico.^ The war which followed was brought to an end 
by the mediation of President Roosevelt and President 
Porfirio Diaz. 

At the Washington Conference, which met a few 
months later, the delegates of Honduras, supported by 
those of Nicaragua, formally proposed that a treaty 
of union be signed, and stated that the presidents of 
those countries were ready to lay down their offices if 
that were necessary to make the execution of the treaty 
possible. This motion nearly caused the disruption of the 
conference, for the delegates from Guatemala opposed 
it, and those from Costa Rica objected even to its being 
discussed. The representatives from Salvador, who were 
at first inclined to favor the plan, voted against it as 
inopportune after receiving instructions to do so from 
their government, and the matter was finally dropped. 
The arguments advanced by the advocates and the oppo- 
nents of this project give a good idea of Central Ameri- 
can opinion in regard to the establishment of a union. 
Senor Piallos, one of the delegates from Honduras, 
emphasized the necessity for a federation to put an end 
to the wars between the states. These, he said, were 
only civil wars which had crossed the national boundaries, 
for there were no real antipathies or conflicting interests 
between the various countries. He dwelt upon the ex- 
pense of keeping up five separate governments and 
armies, — an expense which prevented the use of the 
national revenues for the development of the country. 
The majority of the committee appointed to consider 
the matter, on the other hand, admitted that the Union 
was the greatest and noblest aspiration of Central 
American patriotism, but affirmed that it could not be 
brought about until the economic, moral, political, and 
material conditions of the five republics had been har- 
monized. It recommended for the present the discussion 
of measures which might prepare the way for the Union, 

* See his annual message to the Nicaraguan Congress, Dec. 1, 1907. 



174 THE FIVE REPUBLICS 

such as the improvement of communications, the encour- 
agement of the coasting trade, the estabhshment of uni- 
form fiscal systems and customs duties, the holding of 
annual Central American conferences, and the creation 
of a court of compulsory arbitration.^ 

There seems little probabihty that a stable and endur- 
ing federal government could be established in Central 
America at the present time. Even a union brought 
about by the voluntary action of the five countries would 
almost inevitably fall to pieces sooner or later, however 
patriotic the spirit which presided at its formation. The 
centrifugal forces would be no stronger, perhaps, than 
they were in the North American states before 1787, but 
they would be fatal because it would be impossible to 
provide political machinery for settling them. The estab- 
lishment of a constitutional and orderly administration 
for the five states together would be as difficult as it has 
been for each state alone, for the mere fact of union 
could effect little change in political methods or pohtical 
morahty, and none in the capacity of the people for 
self-government. The nature of the economic and social 
conditions in the four northern countries makes it inevi- 
table that any administration under which they were 
united, if at all centralized, should be a regime of force, 
similar to that which already prevails in each country. 
Heal elections could no more be held throughout the 
entire Isthmus than they can be held in any one state 
today, and in the absence of elections there would be 
no means of changing the authorities of the federation 
except by revolution or by a compromise, not between 
three or four political groups, as in Nicaragua or Hon- 
duras today, but between a large number, few of which 
could be represented in the new government. The 
unfriendly feeling between different sections, which is 
still strong among both the upper classes and the com- 
mon people, and the inevitable jealousy of the small 

^ U. S. Foreign Relations, 1907, II, pp. 669, 721. 



OF CENTRAL AMERICA 175 

states towards the larger ones would sooner or later 
cause dissatisfaction with the working of the federal 
system, and quarrels over such questions as the distri- 
bution of offices and the expenditure of money on inter- 
nal improvements. These difficulties would be intensified 
by the differences in civilization, and consequently in 
political requirements and in points of view between the 
more and the less advanced republics. It is hard to see 
how these conflicting interests could be reconciled by 
a government whose officials and subjects have as yet 
never learned the value of compromise, or the necessity 
of respecting the wiU of the majority and the rights of 
the minority. 

The obstacles to the formation of a permanent union 
by the voluntary action of the five states would be still 
greater in the case of one brought about by force. An 
able leader, supported by the unionist party in each of 
the countries, might impose a federal government on 
the entire Isthmus for a time, but he would meet with 
immense difficulties in upholding his authority against 
hostile pohtical groups because of the difficulty of send- 
ing troops and supplies from one section to another. 
While it endured, his regime could only be a personal 
one. The dissatisfied elements might be held in check 
temporarily, but they would tear the Union to pieces with 
the more fury when the ruler who had founded it was 
forced by his death or by a defeat at the hands of his 
enemies to relinquish his hold upon the supreme power. 

The difficulties in the way of uniting the five republics 
would not be insuperable if the ruling classes were gen- 
uinely ready to co-operate in realizing the national ideal, 
but the men who enjoy the high offices and the control 
of the revenues of the state governments show a decided 
reluctance to giving up any of their power for the com- 
mon good. The local political groups and the influential 
families would necessarily be reduced to a position of 
far less importance if the union were accomplished; and 



176 THE FIVE REPUBLICS 

the realization of this fact makes many of those who are 
most enthusiastic in their advocacy of a Central Ameri- 
can Federation slow to take any definite steps towards 
its realization. It is not difficult for the state authorities 
to frustrate the endeavors of the Unionist party, because 
the common people and even the majority of the upper 
classes show little real interest in the measures which 
are from time to time proposed for actually bringing the 
five republics together. Educated and patriotic people, 
at least in the four northern countries, express themselves 
in favor of union, but they nevertheless bring little influ- 
ence to bear on their governments to support projects 
aiming to bring nearer the time when a Central Ameri- 
can nation can be established. The international con- 
ferences provided for by the Washington Conventions 
of 1907, to take a recent example, met regularly for 
several years to discuss the common interests of the five 
republics and to formulate plans for bringing them closer 
together, but they were finally suppressed because the 
state authorities had failed, apparently from pure indif- 
ference, to carry out any of their excellent and for the 
most part perfectly practical recommendations. The 
realization of the national ideal will not be possible until 
this indifference disappears and a broader patriotism 
takes the place of the jealousy and mistrust which influ- 
ences the relations of the states to one another at the 
present time. 

Moreover, a permanent union will be all but impos- 
sible until a change has taken place in the political 
conditions of the Isthmus. ISTo central government could 
long endure unless it commanded the active support of 
a strong party in every one of the states, and such a 
party could hardly exist on the basis of cliques, resting 
largely on local feeling and personal and family ties, 
such as those which today dominate the political affairs 
of the five republics. An administration set up under 
present conditions could only maintain itself by playing 



OF CENTRAL AMERICA 177 

off against one another the rival factions in the states, 
thus bringing about a situation similar to that which 
caused unbroken turmoil during the hfe of the first 
federation. To secure a soHd basis for the creation of 
a Central American nation, the control of politics must 
be taken out of the hands of the factions as they are at 
present organized, through an increased participation 
in the government by the people at large. The spread 
of popular education and the introduction of foreign 
ideas throughout the Isthmus makes such a change by 
no means a distant probability. When it takes place, 
questions of personal and purely local interests, which 
are now so prominent in affairs of state, will be rele- 
gated to the background, and one of the forces which 
operates most strongly to keep the states apart will thus 
be removed. 

The relations between the five republics would be 
closer if the means of intercommunication were better. 
Although each country possesses railroads and cart roads, 
which give the majority a comparatively adequate inter- 
nal transportation system, they are connected with one 
another only by the roughest of mule paths. Very little 
commerce passes over these, and journeys overland from 
one capital to another are beset by many difficulties. 
Travelers from one country to another, in fact, almost 
invariably prefer to make use of the expensive and not 
very comfortable steamers which run at rare and irregu- 
lar intervals between the ports of the West Coast. This 
lack of transportation facilities not only tends to isolate 
the five republics from one another, but also makes much 
more difficult the problem of establishing a government 
able to exercise an effective military control over all of 
them. The gradual improvement of interstate com- 
munications wiU overcome this difficulty, and will also 
make possible a far greater interchange of products. 

The strong unionist sentiment which exists in the four 
northern countries is not shared by the people of Costa 



178 THE FIVE REPUBLICS 

Rica, who regard the idea of throwing in their lot with 
that of the other repubhcs with an aversion which makes 
their participation in the re-estabhshment of the federa- 
tion very doubtful. The Costa Ricans, having success- 
fully held aloof from the disorders in other parts of the 
Isthmus, have little desire to accept any plan which 
might involve them in the quarrels of their neighbors. 
They are loath to exchange their free institutions for 
the military government which prevails around them, or 
to give up their position as an independent nation to 
become an unimportant part of a country in which 
a majority of the inhabitants, and therefore presumably 
of the voters, would be backward mestizos or uncivilized 
Indians. Rather inclined to be self -centered and self- 
satisfied, they show little sympathy with the nationalist 
aspirations of their neighbors, and they are perfectly 
contented, for the present at least, to continue their 
peaceful development in their own way. 

The free people of Costa Rica could hardly be ex- 
pected to submit to such a government as social condi- 
tions have made inevitable in some of the republics. 
The differences in the internal situation of the five 
countries are really the most discouraging obstacle to 
the realization of the dream of Central American Union. 
Guatemala, for instance, with forty per cent of the 
inhabitants of the Isthmus, must under any fair plan 
of organization have a preponderant influence in the 
councils of the federation. Her wealth and her dense 
Indian population, which is more pliable in the hands 
of the officials than are the ladinos of the other coun- 
tries, would give those who controlled her administrative 
machinery a dangerous power when dissensions arose 
within the federation. It is unthinkable that elections 
there should be anything but a farce for generations to 
come, for the Indians, untouched for the most part by 
the changes which are improving the position of the 
common people in other parts of the Isthmus, must 



OF CENTRAL AMERICA 179 

for a period impossible to calculate remain under the 
political control of the upper classes. For the smaller 
and weaker countries, therefore, the union would present 
many very serious dangers. Human ingenuity could 
hardly devise a form of government able to maintain 
itself against disaffected factions, and to cope with the 
conditions existing in the less advanced parts of the 
Isthmus, v/hich would at the same time be acceptable 
to the people of the more enhghtened sections. 

The realization of this difficulty has led many Central 
American leaders to advocate a confederation, in which 
each state should be left free to manage its own affairs, 
rather than a centralized federal government. As we 
have seen, however, unions of this kind have several 
times been attempted, and have in every case been a 
failure. The states which were parties to them showed 
little respect for the central authorities, and refused to 
allow the latter to exercise any real power. On several 
occasions, war broke out between the very states which 
were parties to the confederation. No Central Ameri- 
can Union, while present political conditions continue, 
can be permanent or beneficial unless the government 
is given real power, not only to represent the Union in 
international relations, but also to maintain order and 
enforce the law throughout its territory. If the in- 
dividual states retained the control of their military 
forces, or if they were under administrations which were 
not in harmony with the national authorities, the fed- 
eration could only expect a short and stormy life. To 
establish a decentrahzed administration would be to 
invite disaffection and revolution, for each local govern- 
ment would become almost inevitably a center of in- 
trigues against the status quo. It is only necessary to 
recall the history of the first Central American Federa- 
tion to appreciate the dangers which a half-way measure 
of union would involve. 

The union of the five republics under a central 



180 THE FIVE REPUBLICS 

^'^ government strong enough to maintain order and make 
itself respected would in many ways greatly improve 
their position. One nation of five million inhabitants, 
with a rich territory 172,000 square miles in area, would 
be in a far better position to deal with the rest of the 
world commercially and diplomatically than five petty 
states whose quarrels make them one another's worst 
enemies. If the peoples of the Isthmus were able to 
present a united front, instead of intriguing with foreign 
governments against one another's tranquillity or forcing 
those governments to intervene in Central American 
affairs by inciting revolutions or engaging in wars 
against neighboring states, one of the most serious 
dangers which today threatens their independence would 
be done away with. Other countries would of course 
rather deal with one central authority than with five 
petty ones. The United States especially, which cannot 
remain indifferent to the disorders arising from the 
dissensions and the rival ambitions of Central American 
rulers, because of its immense interests in the Caribbean 
Sea and the obligations which it assumed in connection 
with the Washington conventions of 1907, could not 
but welcome any change which promised to make for 
peace. 

The suppression of the present governments, with 
their heavy expenditures, would effect an economy 
which would be of the greatest importance to countries 
suffering from so many financial difficulties as do those 
of Central America. In the first place, the cost of 
maintaining five separate presidents, with their suites, 
cabinets, and diplomatic corps, which is one of the 
heavy burdens upon the national treasury today, could 
be eliminated, and many other unnecessary officials could 
be dispensed with. Mihtary expenditures could also be 
cut down, for the armies of the several states are main- 
tained in part at least for use against one another. 
With the money thus saved, the improvement of means 



OF CENTRAL AMERICA 181 

of communication and the development of natural re- 
sources could be undertaken on a larger scale than 
ever before, and could moreover be carried on without 
encountering many of the obstacles which interstate 
jealousy now puts in the way. Much more progress 
than is possible at present could be made in such matters 
as public instruction, sanitation, and the encouragement 
of agriculture; and problems hke the development of 
markets for Central American exports and the pro- 
tection of the national resources against excessive ex- 
ploitation by foreign capitalists could be dealt with 
more effectively by united action. To obtain these 
benefits, however, there must be a central government 
able to preserve order and to make its authority re- 
spected in all parts of the Isthmus, for one which could 
not fulfill these requirements would be worse than none 
at all. 

Projects for the federation of the Central American 
repubhcs have always aroused a friendly interest in 
the United States, where there has been a hope that 
the Union would promote the stability and the political 
and economic progress of the Isthmus. As early as 
1859, President Buchanan secretly offered to support 
Juan Rafael Mora, who had just been exiled from 
Costa Rica, in an attempt to make himself president of 
a restored Central American Union, promising to aid 
him by sending two warships as an evidence of moral 
support. Mora refused, however, on the ground that 
such a Union, even if it could be established, would in 
the end be harmful to the best interests of Costa Rica, 
which would be involved by it in the civil wars of the 
other countries.^ Some years later. Secretary Blaine ex- 
pressed the sympathy of the State Department with 
Barrios' projects for uniting the five countries, although 

* Manuel Argiiello Mora, the Costa Rican president's nephew and constant 
companion, gives an account of this interview, at which he was present, in 
his " Mecuerdos i Impresiones," p. 66. 



182 THE FIVE REPUBLICS 

he declined to intervene or to express approval of the 
use of force in accomplishing them/ In 1907, before 
and after the Washington Conference, there was a con- 
siderable amount of discussion of the question in the 
United States both by officials and by the press. 

More recently, the intervention of the United States 
in the international affairs of the Isthmus, and even 
in the internal affairs of some of the republics, has made 
its attitude towards the question of re-establishing the 
Union more important than ever before.^ Many of 
the leading statesmen of the Isthmus believe today 
that the establishment of a strong and permanent 
federal government can only be brought about through 
active aid from Washington. On the other hand, it 
has been vehemently asserted that the establishment of 
what is virtually an American protectorate over Nica- 
ragua has made it impossible that the other countries 
should join in any union with her until the policy of 
the United States is reversed, since they would subject 
themselves by doing so to the same foreign domina- 
tion. Whether this view is entirely justified may well 
be doubted. In the first place, no permanent political 
connection between the United States and Nicaragua 
has been established, or is likely to be established. The 
government of the North American Republic has indeed 
intervened in Nicaragua to prevent revolutions, but 
it seems probable that it would be forced to do as 
much in any other Central American state where similar 
conditions existed. The arrangements with the North 
American bankers, which have aroused so much opposi- 

^ See U. S. Foreign Relations for 1881 and the years immediately follow- 
ing, under Guatemala. 

^ According to press dispatches dated August 31, 1917, the five Central 
American governments are planning to hold a congress in the near future to 
renew the conventions adopted at Washington in 1907, and to discuss plans for 
a closer union between the states. It is said that all of the other republics 
have accepted the invitation of the government of Honduras to send delegates 
for this purpose. 



OF CENTRAL AMERICA 183 

tion in Central America, are primarily of a financial 
character. It would be idle to deny that they constitute 
infringements of Nicaragua's sovereignty, but they can 
be brought to an end at any time when the Republic 
is ready to repay the money which its government has 
borrowed and to buy back the national property which 
has been sold. It is ridiculous to suppose that either 
the United States or the bankers have any ulterior 
political purposes, or that their aim has been other 
than the improvement of the economic situation of 
Nicaragua. The treaty providing for American con- 
trol of the canal route and for a naval base in the 
Gulf of Fonseca has caused bitter controversies, but it 
is difficult to see how it can have a permanent adverse 
influence on the question of the Union. The United 
States has no interest in Central America more im- 
portant than that of aiding the five republics to become 
strong, prosperous, and well-governed commonwealths, 
and it is therefore impossible to suppose that it will be 
hostile to any movement which promises to improve 
their situation. 

The unionist idea is one which should command the 
sympathy of everyone interested in the future welfare 
of the people of the Isthmus. As we have seen, a stable 
federation, established upon an equitable basis, and 
accepted by all of the five repubKcs, could not but 
gi'eatly improve their situation, making them less ex- 
posed to aggression and interference from outside, and 
encouraging their internal economic and social develop- 
ment. The establishment of such a federation seems 
impracticable at present, and an attempt to unite the 
five countries, whether by force or by the voluntary 
action of their governments, would probably result in 
more harm than good. But the time when a strong 
and progressive Central American nation can be founded 
seems to be drawing steadily though slowly nearer, and 
the forces which are now at work, changing the internal 



184 REPUBLICS OF CENTRAL AMERICA 

and the international situation of the five repubhcs, may 
bring about the consummation which so many of their 
statesmen desire, sooner than now seems possible. Every 
friend of the Central American countries must hope 
that this will be so, in order that the dangers to which 
they are now exposed through their own divisions and 
weaknesses and through the inabihty of some of them 
to afford protection to the life and property of foreigners 
may be averted. 



CHAPTER IX 

THE CAUSES OF CENTRAL AMERICAN 
REVOLUTIONS 

Civil War as a Characteristic Central American Political Institution — 
Character and Extent of the Conflicts — Forces back of Them: Unfitness of 
the People for Democratic Government, Oppression by the Party in Power 
of its Enemies, Rivalry for OflBce, Personalismo and Localismo — Indifference 
of the Mass of the People — Hope for Improvement — Effects of Contact with 
the Outside World. 

The most important fact in the history of the Central 
American republics, from their declaration of independ- 
ence down to the present time, has been the almost 
continuous civil war from which the majority of them 
have suffered. Their inability to establish stable govern- 
ments has retarded their economic and social progress 
in the past, and is a menace to their welfare and even 
to their national existence today. The development of 
agriculture, the building of roads and railroads, and the 
civihzation and education of the masses of the people, 
have been discouraged, both by strife between factions 
at home and contests with neighboring governments, 
and by the misrule resulting from the predominance of 
the military elements which have been brought to the 
front by the premium which these conflicts have placed 
on armed force. The weakness of the five countries, 
moreover, has frequently exposed them to acts of ag- 
gression from foreign powers, and in recent times their 
very independence has been endangered because the 
apparent incapacity of most of them for self-government 
has led to a general belief in Europe and America that 
they must one day fall under the control of some 
stronger power. Under modern conditions, it is im- 
possible for a government which cannot maintain order 

185 



186 THE FIVE REPUBLICS 

and secure to the lives and property of foreigners the 
protection which international law demands to expect 
that its rights of sovereignty, or even its territorial 
integrity, should be scrupulously respected by govern- 
ments which are more powerful and better organized. 
The elimination of internal disorder is therefore one of 
the most serious problems which confronts the people 
of the Isthmus. 

If one asks the average Central American, whether 
of the educated classes or of the common people, what 
has been the principal cause of the revolutions which 
have occurred in his country, he will almost certainly 
answer: the ambition of professional politicians and the 
abuse of power by the government, — the desire of each 
member of the ruling class to hold office, and the 
tendency of each administration to use its authority for 
the personal benefit of those who control its policy and 
for the gratification of their hatred of their opponents. 
The force of this reply can be readily appreciated by 
one who has seen the conditions which exist in some 
of the five republics, but the causes assigned are 
nevertheless hardly adequate to explain the extreme 
prevalence of internal strife in the five republics. There 
are many countries with perfectly stable governments 
which are cursed with politicians more ambitious and 
more selfish than those who have been prominent in 
revolutions in Central America, and many also where 
the opponents of those in power are treated with far 
more severity than falls to the lot of the defeated party 
there. The reasons given indicate, perhaps, the motives 
which actuate those who participate in each revolt, but 
they do not explain the underlying causes which have 
made uprisings against the government more frequent 
in Central x\merica than in almost any other part of 
the civilized world. These causes must be sought, not 
in the aspirations and immoralitj^ of any one relatively 
small group of men, such as that which figures in Central 



OF CENTRAL AMERICA 187 

American political affairs, but rather in the nature and 
working of the governmental institutions and in the 
economic and social condition of the people as a whole. 

The way in which revolution became the only means 
by which the political institutions of the five republics 
could be worked has already been described. The con- 
stitutions which were drawn up for the federal gov- 
ernment and for the five states in the years 1823-25 
provided, as we have seen, for the choosing of the 
more important officials by popular elections; but the 
holding of real elections soon proved to be impossible, 
because of the ignorance and indifference of the great 
majority of the people, and the lack of experience in 
self-government among the ruling classes. The parties 
which were contending with one another for the control 
of the government soon yielded to the temptation to 
employ force and fraud to attain their ends; and the 
voting for officials consequently became, first an occasion 
for periodic disorders, accompanied frequently by an 
appeal to arms, and then a mere farce, in which the 
triumph of the administration candidate was assured 
by the pressure exerted by the government. Within a 
few years after the declaration of independence, force 
had come to be recognized as the only means by which 
power was secured and held, and revolution was not 
only the sole remedy for bad government, but the one 
way in which a change of officials could be effected. 
Civil war was thus an indispensable part of the poHtical 
system. 

Revolutions were of almost yearly occurrence through- 
out the Isthmus during the first half century after the 
declaration of independence, for the development just 
described took place in each of the five countries. In 
some, however, there was early apparent a tendency 
towards avoiding actual warfare, so long as the estab- 
lished government pursued a policy which made its rule 
tolerable to the parties not represented in it. Even 



188 THE FIVE REPUBLICS 

when disaffection grew so strong that a change was 
inevitable, attempts were usually made to bring about 
a compromise. Force still remained the basis of all 
authority, and potential revolution the only corrective 
of bad government, but actual fighting between the 
factions was rare. In Costa Rica, where this tendency 
was strongest, practically no blood has been shed in 
political quarrels for nearly sixty years. Nicaragua and 
Honduras, on the other hand, have had frequent and 
sanguinary revolutions throughout their history as in- 
dependent nations. This difference between them and 
their peaceful neighbor is enough to indicate that other 
factors, besides the mere impossibility of changing their 
governments except by force, have contributed to make 
them turbulent. Before attempting to explain what 
these factors are, however, it is necessary to under- 
stand the nature of Central American revolutions and 
the character and the motives of the persons who par- 
ticipate in them. 

In the first place, it should be borne in mind that the 
average revolution is not a movement which embraces 
a very large number of people or which calls into play 
deep economic or social motives. The countries them- 
selves are very small, for the largest barely exceeds 
fifty thousand square miles in area. In all of them, 
except Salvador, much of the national territory is so 
sparsely settled, and often so impenetrable and unhealth- 
ful, that it hardly enters into consideration as a theater 
of mihtary operations. Of the total population, which is 
probably not more than 600,000 in Nicaragua, Hondu- 
ras, or Costa Rica, only a very small portion is suffi- 
ciently interested in politics to participate voluntarily 
in a civil war. Revolutionary armies, therefore, rarely 
reach any great size, and they rarely need to in order 
to succeed. The military force of the government is 
small, ill-equipped, and poorly trained, and not infre- 
quently part of it proves disloyal in a political crisis. 



OF CENTRAL AMERICA 189 

Although it is impossible to estimate with any degree 
of accuracy how many soldiers are actually under arms 
at a given time in such countries as Nicaragua or Hon- 
duras, it seems very doubtful if the total exceeds two 
or three thousand, and these are scattered through the 
country to such an extent that a much smaller revolu- 
tionary force, sometimes of less than a hundred men, can 
seize and hold an important strategic point before the 
government has time to rally its forces. After an upris- 
ing has started, both sides fill their ranks by voluntary 
recruiting and impressment, but neither is able to raise 
or to fit out any army which would seem very formidable 
to a single well-tfained regiment. It is only necessary 
to recall the stand which William Walker, with a few 
hundred dissolute and undisciplined adventurers, was able 
to make against the combined mihtary power of the five 
republics, in order to appreciate the actual force at the 
disposal of a Central American government. Yet these 
governments are nevertheless able to suppress the 
greater part of the revolts which occur against their 
authority. 

The spirit which causes the revolutions is not often 
one which arouses very much enthusiasm among the peo- 
ple at large. Their leaders are usually inspired by a 
thirst for offices and spoils or a desire for revenge against 
political rivals who have oppressed them, and the rank 
and file are actuated mainly by sectional or class jealousy, 
but rarely by any genuine political motives. There are 
of course many men in politics who seek to obtain con- 
trol of the government, even by revolution, in order to 
effect economic and social reforms. Generous and 
patriotic ideas are found both among the chiefs and their 
followers in all parties, but they play a smaller part 
in actually bringing about a revolt than do the less 
creditable but still very human motives upon which the 
political parties are built up. 

Revolutions are rarely the result of a widespread con- 



190 THE FIVE REPUBLICS 

spiracy among the people. Even a large portion of the 
active members of the party interested often know little 
about the plans of the leaders until an armed uprising 
has already taken place. The procedure followed is 
much the same in nearly all cases. A group of factional 
chiefs, with a fev/ score of their more intimate personal 
followers, raise the standard of revolt with a pronuncia- 
mento against the government, naming one of their 
number as provisional president. An attempt is made 
either to seize from within some town in which the revo- 
lutionary party is particularly strong, or to invade the 
country from outside, occupying one of the seaports as 
a base of operations. The latter is perhaps more com- 
mon, because the important members of the opposition 
party are generally in exile. The revolution not infre- 
quently gains its foothold, as did that of 1909 in Nica- 
ragua, through the treachery of local authorities who 
turn over to it the soldiers and the military supplies 
under their control, or by the disaffection of high offi- 
cials sufficiently influential to carry with them a con- 
siderable part of the army. Arms and supplies are 
secured from some neighboring government which has 
reasons for wishing to overthrow the existing adminis- 
tration, or from foreign corporations and speculators 
who wish concessions or special privileges. A revolt 
often attains formidable proportions in this way before 
the government can raise and equip an army to send 
against it, as it usually starts in regions remote from the 
capital, where it is able to consolidate its forces before 
it meets with serious opposition. In the districts still 
under the control of the authorities, meanwhile, martial 
law is proclaimed, known or suspected adherents of the 
party responsible for the revolution are thrown into jail, 
horses and other property are requisitioned for the army, 
and every able-bodied man of the laboring and artisan 
classes, except those who succeed in concealing them- 
selves, is pressed into service as a soldier. The result, of 



OF CENTRAL AMERICA 191 

course, is an immediate paralyzation of agriculture and 
commerce. A revolution thus begun often lasts several 
months before there is a decision, although only a few 
battles are fought, and only two or three thousand men, 
and often less, are engaged on each side. If the rebels 
win a few successes at the beginning, or if the govern- 
ment is unable to defeat them after a prolonged cam- 
paign, the president usually falls, because of his loss of 
prestige and because of the defection of the always 
numerous politicians who desire above all else to be on 
the winning side. When this occurs, there is a complete 
demoralization of all of the departments of the admin- 
istration, accompanied, not infrequently, by a split in 
the victorious party or a counter revolution on the part 
of the defeated. Order is not restored until pne strong 
leader or group of leaders has established Tlimself or 
itself in complete mihtary control. 

Since these revolutions are the work of so small a pro- 
portion of the people, their causes must evidently be 
sought not so much in any inherent disorderliness and 
lawlessness of the nation as a whole, as in the questions 
which have divided the classes interested in politics, and 
in the conditions which have made it possible for these 
classes to plunge the community into civil war time after 
time by their incessant feuds, without being effectually 
checked by the desire of the rest of the country for 
peace. 

The instigators and leaders of Central American revo- 
lutions are in almost every case the pure-blooded, or 
nearly pure-blooded, descendants of the conquistador es, 
and one of the chief causes of these phenomena must 
therefore be sought in the characteristics which the Creole 
aristocracy has inherited from its sixteenth century ances- 
tors. Among the Spaniards who founded the colonies on 
the Isthmus there were a few respectable families, but the 
majority were adventurers, fugitives from justice, and 
soldiers who had been left without occupation by the 



192 THE FIVE REPUBLICS 

cessation of the wars against the Moors, and came to 
America in search of excitement and easily gained wealth. 
In exploring and subjugating the Indian kingdoms, they 
showed a bravery and an indomitable energy which have 
few parallels in history, but as colonists they were tur- 
bulent, lawless, and unprincipled. Their cruelty towards 
the Indians has already been described. Their dissen- 
sions among themselves, before the government at home 
had firmly established its mihtary control over them, 
forecasted what might be expected when the authority 
of Spain should be withdrawn, for the bloody clashes 
between rival exploring parties, the vindictiveness and 
treachery exhibited towards one another by ambitious 
governors who could not agree upon the extent of their 
respective jurisdictions, and the occasional uprisings, 
like that of the Contreras brothers in Nicaragua, among 
the rabble of the Spanish settlements, made the annals 
of the Central American provinces during the sixteenth 
century one long chronicle of bloodshed. After the 
declaration of independence, it was the descendants of 
the early colonists who carried on the civil wars which 
lasted almost without intermission for so many years. 
The leaders of the political factions, — the men who fill 
the higher offices when their party is in power and bear 
the brunt of the opposition at other times, — are still for 
the most part members of the white upper class, even 
though the exclusiveness of the old Creole aristocracy 
has been broken down. 

It is rather surprising to find the native landholders 
and merchants, who have more interest than anyone else 
in the maintenance of order and good government, taking 
the lead in the civil wars which have made order and 
good government impossible. But the feuds which have 
divided the educated and wealthy classes among them- 
selves have been so bitter that it has been impossible 
down to the present time for their leaders to co-operate 
with one another in establishing and supporting a stable 



OF CENTRAL AMERICA 193 

and efficient government. The custom of proscribing and 
despoiling political enemies has kept alive and intensified 
the personal hatred between the members of the rival 
parties even in those countries where there are no funda- 
mental economic or social questions upon which the ruling 
classes are divided. After a change of government, the 
more prominent adversaries of the victorious party are 
usually exiled or imprisoned; their property is taken 
from them either by outright confiscation or forced loans ; 
and their constitutional rights are little respected by the 
officials or by the courts. When an outbreak against 
the government is attempted or threatened, many of those 
of its opponents who are still at liberty are seized, and 
even their wives and children are subjected to imprison- 
ment and mistreatment, and sometimes, as under the 
government of President Zelaya in Nicaragua, to bar- 
barous tortures. These persecutions, inspired not only 
by a determination to prevent uprisings against the 
government, but often by a desire for revenge and for 
the gratification of individual spite, frequently make the 
situation of the enemies of the administration so intol- 
erable that they prefer to risk everything in a revolt 
rather than to submit. This has been especially true in 
countries where continual revolutions have kept party 
feeling at white heat, accustoming all classes to regard 
civil war almost as a normal condition, and forcing the 
government to take severe measures against all whom 
it thinks likely to resist its authority by force of arms. 
Peace can never be hoped for under these conditions. 
The only republics of Central America which have made 
any real progress towards stable government are those 
where the opponents of the party in power are treated 
with comparative fairness, and where confiscation and 
imprisonment for pohtical reasons are rare. 

Resistance to oppression, however, is by no means the 
only motive which leads members of the upper classes 
to engage in intrigues and revolts against the govern- 



194 THE FIVE REPUBLICS 

ment. The pursuit of office is in itself an attractive 
occupation, for every member of the small ruling class 
has a comparatively good chance of becoming president 
or cabinet minister or of attaining some other honorable 
and lucrative position. The rewards offered by politics 
are on the whole greater than those held out by the more 
solid occupations, especially in those countries where 
continual disorder make agriculture and commerce a 
precarious means of securing a livelihood, for very few 
of the native planters or merchants receive so great an 
income as they could secure, legitimately or illegitimately, 
at the expense of the community if they could reach one 
of the higher positions in the government. Politics, 
moreover, provides the natural outlet for the energies of 
those members of the upper class who have no property. 
This is especially true of the great majority of the law- 
yers, doctors, and dentists, few of whom secure a respec- 
table hving from their overcrowded professions. 

Many members of the wealthy and educated classes, 
however, have always worked for peace, realizing that 
revolutions not only deprived their property of most 
of its value, but also lessened their own influence in 
the community by raising demagogues and purely mili- 
tary leaders to positions of prominence. The influ- 
ence exerted by this moderate party has depended upon 
the economic development of each country. In Costa 
Rica and Salvador, where the cultivation of coffee has 
been developed until it offers a more attractive field 
of endeavor than poHtics, the great landholders have 
been a powerful factor in bringing about the establish- 
ment of stable government. In Guatemala also, the 
prosperity of agriculture has probably favored peace, 
although the bitterness of party strife in that country 
and the backwardness of the Indian population have 
greatly retarded its political development. Agriculture 
in Honduras and Nicaragua, on the other hand, being 
still in a primitive condition, affords a comparatively 



OF CENTRAL AMERICA 195 

unattractive occupation, and politics may still be said 
to be the chief interest of the propertied classes. 

Although the landholding and professional classes fur- 
nish the leaders, the revolutions would hardly be possible 
without the participation of the far more numerous other 
elements in the community. The half-breed artisans 
in the towns and villages form perhaps the largest part 
of the factional armies. These laborers, who have little 
property, and therefore, so far as they can see, little 
direct interest in the preservation of peace or the eco- 
nomic well-being of the community, find in civil war both 
a welcome source of excitement and an avenue for per- 
sonal advancement and profit, for the opportunities for 
loot during the campaigns, and the rewards distributed 
among the adherents of the victorious party after a suc- 
cessful revolution, make conspiracy and revolt a more 
lucrative occupation than hard labor at a trade. There 
is no way in which the intelligent but unstable ladino, 
little inclined to steady manual or intellectual labor, can 
so easily achieve wealth and influence as by the pursuit 
of politics, — a vocation which makes it possible for a boy 
of the humblest, barefooted, ilMterate family, coming 
from a thatched, one-room hut in the mountains, to rise 
to a position where he is addressed as " Great and Good 
Friend " by the heads of the leading nations of the world. 
Not a few artisans and professional soldiers of this class 
have actually risen to such a position, and some, espe- 
cially in the Liberal party, have been presidents of their 
countries for long periods. Ordinarily, however, they 
play a less prominent part in affairs than the members 
of the white aristocracy, who have the advantage of 
superior education, social prestige, and wealth. 

Those who hope to derive some direct individual profit, 
however, form but a small part of the number of per- 
sons engaging in a typical revolution. The rebel leaders 
would have but little hope of overcoming the advantage 
conferred on the government by its control of the admin- 



196 THE FIVE REPUBLICS 

istrative machinery, and above all of the standing army 
and mihtary stores, if they did not receive active support 
from adherents far too numerous to be rewarded by 
offices or money in the event of victory. The principal 
motive which brings together the rank and file of a 
revolutionary army is '' personalismof' — the devotion to 
individual chiefs, sometimes the heads of great families, 
sometimes professional soldiers, sometimes mere dema- 
gogues, whose relation to their followers is usually not 
so much that of political leaders as of friends and 
patrons. Ties of blood, friendships, and gratitude for 
favors received or expected play a much greater part in 
holding these factions together than community of ideals 
or principles; and the very nature of the parties con- 
sequently makes the strife between them the more bitter 
and compromise the more difficult. Closely connected 
with this personalismo is localismo, the jealousy and 
rivalry between town and town, which makes the polit- 
ical leaders of each hostile to those in other parts of the 
country and enables them too often to carry the common 
people with them in their armed opposition to a govern- 
ment controlled by their enemies. We have already 
seen how disastrous an influence this spirit has exerted 
in the history of the Isthmus, and how it has been inten- 
sified by continual internal strife and by the persecution 
of the people of one section by those of another. 

Other factors also have often contributed, though 
usually in a minor degree, to bring about an uprising 
against the government. ReHgious questions have been 
a source of much trouble, although they are less impor- 
tant at present than in the early history of the Isthmus. 
The Church has now lost its one-time influence through 
the decline of religious feeling among the people, but in 
the first half century after the declaration of independ- 
ence it was often strong enough to instigate a revolt 
against a government which oppressed it, or, by its own 
exactions, to cause one against a government which 



OF CENTRAL AMERICA 197 

supported it. Abuses of power by the officials, or the 
adoption of a policy which directly injured a large por- 
tion of the people, have sometimes done much to make 
a revolution possible, and dissatisfaction with the existing 
administration, apart from any desire to put any other 
group of individuals in power, always causes many per- 
sons to join -the ranks of the rebel army. Many others 
take part merely for the sake of excitement and plunder, 
— because they wish to fight and to " eat fat cows." The 
revolutions, when they have once started, naturally 
attract all of the discontented and adventurous elements 
in the community. But it is personalismo and localismo 
which make it possible for them to start, and which hold 
the armies participating in them together through the 
exigencies of the conflict. 

Only a small part of the people, however, enter at all 
into these party conflicts. The great majority, especially 
in the rural districts, know little and care less about 
political affairs. They dislike and fear the revolutions, 
which often involve forced military service for themselves 
and destruction for their livestock and their little patches 
of corn and beans, but they have been so accustomed to 
misgovernment and exploitation ever since their ancestors 
were conquered by the Spaniards that it never occurs 
to them to make a concerted effort to check the disorderly 
tendencies of the politicians. It is this ignorance and 
indifference of the masses of the people, rather than any 
disposition to turbulence in the nation as a whole, which 
has prevented the establishment of stable government 
in many of the Central American repubhcs, by making 
it impossible to hold elections and work the constitution 
by peaceful means, and by permitting rival cliques of 
professional office-seekers to plunge the country into civil 
war time after time for the gratification of personal 
ambitions and feuds, without other restraint than that 
suggested by their own interests. 

It is sometimes asserted that it is the Indian and part 



198 THE FIVE REPUBLICS 

Indian element which is chiefly responsible for the disor- 
ders in Central America. This view seems to find justi- 
fication in the tranquillity of Costa Rica, where the popu- 
lation is almost entirely of Spanish descent, but it is, 
in fact, very unjust to a race which is on the whole more 
peaceful, law-abiding, and industrious than the descend- 
ants of their conquerors. The Indians rarely participate 
in a revolution. In Guatemala, where they have retained 
their racial identity more than in any other part of the 
Isthmus, they have hardly ever risen against the govern- 
ment since their final subjugation at the beginning of 
the colonial period, although they have always been 
forced to serve against their will both in the standing 
army and in revolutionary forces. The only real popu- 
lar uprising which has occurred in that repubhc, — the 
revolution which placed Carrera in power in 1838, origi- 
nated not among the Indians but among the ignorant 
ladinos in the districts east of the capital, where the con- 
ditions are far more similar to those of Honduras and 
Nicaragua than to those which prevail throughout the 
greater part of Guatemala itself. It was among the 
half-breeds that Carrera secm-ed the followers who 
enabled him to estabhsh his military despotism, and it 
was these same half-breeds, under the influence of the 
village priests, who made the Church so strong a factor 
during the Conservative administration. In Nicaragua, 
the semi-civilized rural population m the district of 
Matagalpa and the villages which have retained their 
distinctly Indian character in the southwestern Sierras 
have as a rule remained neutral, so far as they could, in 
the contests between Leon and Granada, although the 
Indians of Matagalpa revolted on one occasion, about 
thirty years ago, when they were forced to aid in con- 
structing a telegraph line into their country. The 
Indians in the foiu- northern countries, indeed, are re- 
sponsible for the revolutions only in the sense that they 
are helpless to prevent them. Their situation is very 



OF CENTRAL AMERICA 199 

different from that of the common people of Costa Rica, 
where the early extinction of the aborigines made pos- 
sible the development of a compact, homogeneous com- 
munity of white peasants, among whom it was compara- 
tively easy to estabhsh stable poHtical institutions. 

The causes of Central American revolutions, therefore, 
may be said to be: first, the attempt to impose political 
institutions copied from one of the world's most ad- 
vanced democracies upon a country where elections were 
absolutely impossible; second, what may be called the 
habit of revolution among the ruling class and the people 
of many of the towns, — a habit formed during the turbu- 
lent years that followed the breakdown of the federal 
constitution, and perpetuated by the bitterness of per- 
sonal feuds and sectional jealousy, the pursuit of politics 
as a money-making occupation, and the mutual persecu- 
tions of rival factions; and third, the backwardness of 
the masses of the people, which has not only made the 
repubHcan constitutions unworkable, but has also pre- 
vented those who in the long run suffer most from civil 
war from exerting any effective influence for peace. 

None of these causes can be said to be permanent. 
There is no reason to suppose that stable governments 
will not be attained eventually in all of the five republics, 
as a result of the education of the people. The public 
schools, which have been established in the last quarter 
century even in the remote country districts of the Isth- 
mus, have already done much to improve the situation 
and enlarge the outlook of the masses of the population, 
and to hasten the approach of the day when they will 
be able to assimae the control of their own affairs through 
the democratic machinery which already exists on paper, 
and to protect themselves against the disastrous con- 
sequences arising from the factional quarrels of selfish 
professional pohticians. This influence makes itself felt 
slowly, but the social and pohtical effects of popular 
education, once they have asserted themselves, can never 



200 THE FIVE REPUBLICS 

be undone. The penetration of foreign ideas and the 
increase of wealth and improvement of standards of living 
which have resulted from the development of foreign 
commerce are also doing their part in changing the situa- 
tion of the countries of the Isthmus. The landholding 
classes, as we have seen, are already exerting a strong 
influence in behalf of peace in the more prosperous coun- 
tries, for their success in agricultural pursuits has greatly- 
lessened their interest in pohtics. The laboring classes, 
also, have found new opportunities for employment and 
advancement, and are beginning to learn by experience 
that their own welfare is dependent upon the peaceful 
development of their country. The factors in favor 
of stable government have thus been immeasurably 
strengthened. 

Those who hope for the ultimate political regeneration 
of the Isthmus receive much encouragement from the 
example of Costa Rica, which started upon her inde- 
pendent existence with the same institutions and the 
same inexperience in self-government as her neighbors. 
Costa Rica, it is true, has owed her freedom from civil 
war largely to her isolation and her homogeneous Euro- 
pean population, but the substitution of a popularly 
elected and constitutional government for the military 
tyrannies which had existed at first there as well as 
in other parts of the Isthmus was due primarily to the 
education of the common people and to the increasing 
realization on their part of their interest in the conduct 
of public affairs. There is no reason to suppose that a 
similar development will not take place eventually in 
Nicaragua, Honduras, and Salvador, and even among 
the Indians of Guatemala. The people of those coun- 
tries have never had the opportunities for peaceful prog- 
ress which the prosperous peasants of Costa Rica have 
enjoyed, but there seems little reason to suppose, from 
observation of the races as they work side by side in 
schools and public offices, that the Indian or the mestizo 



OF CENTRAL AMERICA 201 

cf the other republics is inherently less capable of ad- 
vancement or less fitted for self-government than his 
fellow-citizen of Spanish descent. 

The changes brought about by increased intercourse 
with foreign countries have on the whole favored sta- 
bility and good government, but in some respects they 
have been far from beneficial. While agriculture or com- 
merce has been made a more attractive occupation than 
conspiracy and revolt for many of the great landholders, 
many others have been driven out of these pursuits and 
into politics, as the only means of making a living which 
remained open to them, by the immigration of more 
efficient foreign planters and businels men. We have 
already seen to what an extent this has taken place in 
some of the five countries. The interest in peace among 
the classes who by wealth and education are best qualified 
to be the leaders of the community has been lessened 
by the loss of their property, and the number of pro- 
fessional politicians and revolutionists who are almost 
entirely dependent upon the pursuit of office for sup- 
port has been swelled by members of many families 
which formerly devoted their energies to more useful 
occupations. 

Xot a few of the foreigners, moreover, have taken 
part in civil wars and disturbances, for the furtherance 
of purely selfish aims, and to the great detriment of the 
native community. The Xorth American or European 
professional revolutionist, usuall\^ an adventurer or a 
fugitive from justice in his own countn,-, is a type which 
is all too familiar in the more disorderly countries of the 
Isthmus. He is rarely ami;hing more than a mercenary 
soldier, ready to offer his sen^ices to the highest bidder, 
but his presence is a source of annoyance and danger 
to the constituted authorities, and the viciousness and 
greed of some who have been rewarded for their assist- 
ance in war with official positions has equaled if not 
exceeded that of the most depraved native leaders. The 



202 THE FIVE REPUBLICS 

participation of these men in the armies on both sides 
of a civil contest, moreover, is often a positive danger 
to the Central American countries, because of the regret- 
table readiness of the great powers of the world to pro- 
tect their citizens in their real or fancied rights even 
when they are engaged in an occupation so little com- 
mendable as that of making war for money against a 
constituted government. A significant example of the 
difficulties which arise from this source was afforded by 
the events which followed the shooting of two American 
adventurers during the Nicaraguan revolution of 1909/ 
Still more dangerous to the welfare of the Central 
American countries are the foreign corporations which, 
for equally unworthy purposes, often render open or 
covert aid to a revolutionary movement, in order to 
assure themselves of the protection and favor of the new 
government. There is unfortunately little doubt that 
recent uprisings in Honduras and Nicaragua have been 
financed and supplied with arms from New Orleans, or 
that they have owed their success largely to the aid thus 
received. So long as the resources of the five republics 
continue to be developed under special concessions and 
privileges, there will inevitably be a strong temptation 
for the large fruit companies and other corporations hav- 
ing interests there to intervene in political affairs, because 
of the great part which official favor or disfavor plays in 
determining the conditions under which they do business. 
Such a situation is disastrous to the internal peace of the 
countries involved, for any discontented faction can 
usually secure support from some group of investors 
or speculators who think that they can further their 
interests or secure valuable concessions by promoting 
a revolution. In the governments which come into power 
in this way, however, the influence of the foreign cor- 
porations which have aided them is generally far less 
than might be expected, for Central American poHtical 

^See Chapter XI. 



OF CENTRAL AMERICA 203 

leaders are none too grateful and none too scrupulous 
about carrying out obligations which they have entered 
into; and they rarely lose sight of their distrust of the 
foreigner in their appreciation of his assistance. 

The disturbing influences introduced by intercourse 
with other countries, however, are offset, and more than 
offset, by the pressure which foreign governments, actu- 
ated by a desire to protect their subjects who have settled 
or invested capital in Central America, have exerted in 
behalf of peace. The United States, especially, has been 
forced to take positive action to prevent civil and inter- 
national wars in the Isthmus, not only because its com- 
merce and its investments there are larger than those 
of any other nation, but also because its settled policy 
not to permit European intervention in the affairs of the 
weaker American nations has made it necessary to adopt 
measures which deprive other powers of an excuse for 
interference. Inspired by a desire to promote the sta- 
bility and well-being of its neighbors, the United States 
has in the last ten years taken more and more radical 
steps to safeguard the peace of the Isthmus, until it has 
finally reached the point of actually suppressing revolu- 
tions in one of the countries by force. Its influence has 
therefore become the most potent factor, for good or for 
evil, both in the external and the internal affairs of the 
five republics. No description of Central American con- 
ditions would be complete without a discussion of the 
way in which this influence has been exercised. 



CHAPTER X 

THE WASHINGTON CONFERENCE 
OF 1907 

The Increased Responsibilities of the United States in the Caribbean 
Sea Since 1900— The San Jose Conference— The War of 1907— The Washington 
Conference and the Conventions Adopted by it — Their Effectiveness in Pro- 
moting Internal and International Peace — Work of the Central American 
Court — The Central American Conferences and the Central American Bureau. 

The first years of the twentieth century have brought 
about a decided change in the attitude of the United 
States towards its neighbors around the Caribbean Sea. 
The increasing importance of our pohtical and economic 
interests in those countries has made their domestic pros- 
perity and the maintenance of their independence from 
European influence more than ever before essential to 
our own well-being. American investments and trade 
in the West Indies have attained such great proportions 
that anything which aifects the normal life of one of 
the countries of that region is felt at once in commercial 
and financial centers in the United States. The sugar 
plantations of Cuba and the banana plantations of Cen- 
tral America, to take only two examples, represent many 
millions of dollars of American capital, and at the same 
time are important sources of the food supply of the 
American people. Simultaneously with the expansion 
of our economic interests, our political interests in the 
Caribbean have become of paramount national impor- 
tance. The acquisition of Porto Rico, and much more 
the building of the Panama Canal, have made it impos- 
sible for the United States to remain indifferent when 
international compHcations arise which affect the mili- 
tary situation or the political status of countries close to 
these possessions. The Monroe Doctrine, as applied to 

204 



REPUBLICS OF CENTRAL AMERICA 205 

the American tropics, has thus become more than ever 
an indispensable national policy. 

At the same time, the maintenance of the Monroe 
Doctrine has involved increasingly heavy responsibilities 
and burdens, because the commercial and financial inter- 
ests of other countries in the Caribbean have also in- 
creased as that region has been developed economically 
and commercially. Even when they have had no ulterior 
political motives, the European powers have been unable 
to stand by with equanimity while the security and the 
interests of their citizens were endangered by the con- 
tinual revolutions and other disorders which have occurred 
in some tropical American states. There has conse- 
quently been evident an increasing disposition on their 
part to use force both to secure protection for their 
nationals and to obtain the payment of debts due to the 
latter by irresponsible and unscrupulous governments. 
To such interventions, which necessarily tend to assume 
a political character, the United States cannot possibly 
remain indifferent. Neither, however, can it oppose itself 
to the protection by another country of the lives and 
property of the latter 's subjects. European interfer- 
ence in the affairs of American countries can only be 
averted if the United States itself assumes the duty of 
protecting foreigners in the more turbulent of the neigh- 
boring republics, and the Monroe Doctrine can only be 
upheld in the long run if intelligent and disinterested 
efforts are made to help those republics to remedy the 
conditions which at present expose them to aggression. 
As President Roosevelt said in 1905: 

"We cannot permanently adhere to the Monroe 
Doctrine unless we succeed in making it evident, in the 
first place, that we do not intend to treat it in any shape 
or way as an excuse for aggrandizement on our part at 
the expense of the Republics to the south of us; second, 
that we do not intend to permit it to be used by any of 



206 THE FIVE REPUBLICS 

these Republics as a shield to protect that Republic from 
the consequences of its own misdeeds against foreign 
nations; third, that inasmuch as by this doctrine we pre- 
vent other nations from interfering on this side of the 
water, we shall ourselves in good faith try to help those 
of our sister republics which need such help, upward 
toward peace and order." ^ 

The first occasion on which the new policy of the 
United States became evident in its dealings with the 
Central American republics was in 1906, when there 
was a war between Guatemala and Salvador, in which 
Honduras, as the ally of the latter country, also became 
involved. The conflict had arisen from the aid furnished 
by some of the officials of Salvador to a revolutionary 
movement directed against President Estrada Cabrera. 
After exerting his influence in vain to prevent the out- 
break of hostilities. President Roosevelt invited President 
Diaz of Mexico to join him in offering mediation. The 
efforts of the two governments, seconded by those of 
Costa Rica, resulted in the holding of a peace confer- 
ence on the deck of the U. S. S. Marblehead, at which 
representatives of the United States, Mexico, Costa Rica, 
and Nicaragua were present, as well as the plenipoten- 
tiaries of the three belligerents. At this meeting an 
agreement was signed providing for the cessation of 
hostilities and the disarmament of the contending forces, 
and for another conference, to be held later, to conclude 
a general treaty of peace.^ 

The second conference was held at San Jose, Costa 
Rica, in September of the same year. Each of the 
Central American republics was invited to send dele- 
gates, and all did so with the exception of Nicaragua. 

^ Quoted by Critchfield (American Supremacy, Vol. II, p. 419) from 
a speech made at Chautauqua. 

* U. S. Foreign Relations, 1906, I, 834flF. Mexico, Boletin Oflcial de la 
Becretaria de Belaciones Exteriores, Vol. 22, p. 235. 



OF CENTRAL AMERICA 207 

President Zelaya declined because he was unwilling to 
recognize the right of the United States to intervene 
in Central American affairs/ The governments, repre- 
sented agreed that all differences arising out of the late 
war should be arbitrated by the United States and 
Mexico, and that future disputes should be settled by 
Central American tribunals, specially organized to deal 
with each case as it arose. They pledged themselves to 
keep poHtical refugees from other states away from the 
frontiers of the countries from which they had been 
exiled, and not to allow their territory to be used as a 
base for revolutionary movements against their neigh- 
bors. Provision was made also for the establishment 
of a Central American Bureau in Guatemala City and 
a pedagogical institute in Costa Rica; and general con- 
ventions were signed regulating commerce, navigation, 
and extradition. The work of the San Jose Conference 
was superseded by that of the Washington Conference 
of the following year, when the treaties entered into were 
reaffirmed and given greater weight by the moral sup- 
port of the United States and Mexico.^ 

The San Jose Conference was followed by a year of 
almost continuous disorder. In December, 1906, a revo- 
lution was started in Honduras against the government 
of Manuel Bonilla. The rebels were operating close to 
the Nicaraguan boundary, and it was asserted that they 
were receiving aid from President Zelaya. Whether or 
not this was so, an alleged violation of Nicaraguan terri- 
tory by the troops of Honduras soon made war seem 
inevitable. At the urgent request of the United States 
and of the other Central American republics, both Zelaya 
and Bonilla agreed to submit the dispute to the arbitra- 
tion of a tribunal composed of one member from each 
Central American republic, which met at once at San 
Salvador. Before taking up the matter in dispute, this 

^ Nicaragua, Mem, de Relaciones Exteriores, '07, p. xxvii, 5. 

* For the text of these conventions, see U. S. For. Rel., '06, I, p. 857. 



208 THE FIVE REPUBLICS 

body demanded that both parties withdraw their armies 
from the border. As Zelaya refused to do this, and fur- 
thermore declared in advance that he would not accept 
any settlement which did not make full reparation for the 
violation of the Nicaraguan frontier, the tribunal dis- 
solved. Zelaya at once declared war on Honduras, and 
sent forces to co-operate with the revolutionists there. 
Salvador, on the other hand, assisted the Bonilla admin- 
istration, at first indirectly and later by sending troops, 
although her government remained ostensibly neutral. 
Despite this aid, Bonilla's forces were completely de- 
feated at I^amasigue, on March 18, 1907, and not long 
afterward Tegucigalpa and Amapala, where Bonilla made 
his last stand, were captured by the Nicaraguan troops 
and the Honduranean revolutionists. Miguel Davila 
was inaugurated as provisional president of Honduras.^ 

By this time, another general conflict seemed inevi- 
table. Zelaya was preparing to attack Salvador, and 
President Estrada of Guatemala, fearing the extension 
of Nicaraguan influence, was apparently ready to inter- 
vene in defense of his neighbor. The United States and 
Mexico, however, at the request of the governments of 
Costa Rica, Guatemala, and Salvador, again exerted 
their good oflices, and finally brought about a conference 
at Amapala between the ministers of foreign affairs of 
Nicaragua and Salvador. Here, with the assistance of 
the diplomatic representatives of the United States, an 
effort was made to settle the differences between these two 
countries. The chief question at issue was the presidency 
of Honduras, for Salvador declared that she could not 
accept terms of peace which did not assure the existence 
of a government in that Republic which would be satis- 
factory to her and to Guatemala, which had now become 
her ally against Zelaya. After a long discussion of 

^ U. S. Foreign Relations, '07, p. 606; Nicaragua, Memoria de Belaciones 
Exteriores, '07, most of which is devoted to an account of the events here 
discussed. 



OF CENTRAL AMERICA 209 

various names in an effort to find a candidate who would 
not only be acceptable to all of the neighboring govern- 
ments, but who would also be able to maintain himself 
in power in Honduras, the delegates finally agreed upon 
General Terencio Sierra, a former president of Hondu- 
ras, who was then in command of the Nicaraguan forces 
at Amapala. They accordingly signed a secret treaty, 
by which they pledged themselves to overthrow the 
Davila government and to set up one under Sierra in 
its place. Nicaragua, however, as the fifth article stated, 
found it difficult to attack President Davila, who was 
her ally, and therefore left this to Salvador. After 
Davila was disposed of, both were to join in assisting 
Sierra, and he was to be considered the ally of both.^ 
Having settled this matter, they drew up a general peace 
treaty. 

The terms of these treaties were never carried out. 
The exigencies of her internal politics prevented Salva- 
dor from supporting Sierra, and Davila was consequently 
able to establish himself firmly in power. His govern- 
ment, set up by Nicaraguan arms, was of course per- 
fectty acceptable to Zelaya, but the latter nevertheless 
made the failure of Salvador to carry out the stipulations 
of the Amapala agreement a pretext for again beginning 
hostihties against that country. Animated, as he said, 
by a desire for the union of Central America, he openly 
aided a revolt against the government of President 
Figueroa, sending men and suppHes to Acajutla on a 
Nicaraguan gunboat." This expedition was repulsed, and 
further hostilities were averted by the energetic repre- 
sentations of the United States. 

Zelaya's avowed agressive designs against the other 
states, and his control over the government of Honduras, 
created a situation which was intolerable to Guatemala 

^ For the text of this treaty, see Nicaragua, Memoria de Belaciones 
Exteriores, '07, p. 405. 

- Annual message to Nicaraguan Congress, Dec. 1, 1907. 



2ia THE FIVE REPUBLICS 

and Salvador. It was soon evident that these countries 
were planning to attack him, by the usual means of aid- 
ing revolutions in Nicaragua and Honduras. The situa- 
tion became very threatening in the latter part of the 
summer of 1907, for the four states were already massing 
armies on their frontiers. In view of the imminent dan- 
ger of war. Presidents Roosevelt and Diaz jointly offered 
their mediation, and brought pressure to bear on the 
various governments to cease their hostile preparations. 
As a result, it was agreed that a conference should be 
held in Washington to settle all outstanding difficulties 
and permanently to establish the relations of the Central 
American repubhcs on a peaceful basis. The United 
States and Mexico were invited to appoint representa- 
tives " to lend their good and impartial offices in a purely 
friendly way towards the realization of the objects of 
the Conference."^ 

The delegates of the &ve Central American countries 
met in the Bureau of American Republics on November 
14, 1907. The United States was represented by Mr. 
William I. Buchanan, whose tact and perseverance were 
inestimably valuable in the negotiations of the succeeding 
five weeks. Secretary of State Root and Senor Creel, 
the Mexican ambassador, made speeches at the inaugural 
session, and the Conference began its work under the 
most favorable auspices, animated by a spirit of mutual 
good will and by a genuine desire to bring about peace 
in Central America. Following the lead of Salvador, 
each government in turn declared that it had no claims 
or grievances against its neighbors, and that it was ready 
to proceed at once to a discussion of plans for a closer 
imion between the repubhcs. A proposal by Nicaragua 
and Honduras for the inmiediate establishment of a 
Central American federation caused a temporary inter- 
ruption of the prevailing good feehng, but harmony was 

^ Article II of preliminary protocol, signed Sept. 17, 1907. U. S. For» 
Rel., '07, II, p. 644. 



OF CENTRAL AMERICA 211 

soon restored, and the work of the Conference proceeded 
smoothly until December 20, when eight conventions, 
representing the fruit of its deliberations, were signed 
by the delegates/ 

The first of these was a general treaty of peace and 
amity, by which the five governments sought to remove 
several of the chief causes of revolutions and interna- 
tional wars in the Isthmus, and to provide for a closer 
co-operation in promoting their common interests. 
Among its most important provisions were the following: 

Article I. " The Republics of Central America . . . 
bind themselves to always observe the most complete har- 
mony, and decide every difference or difficulty that may 
arise amongst them, of whatever nature it may be, by 
means of the Central American Court of Justice created 
by the Convention which they have concluded for that 
purpose on this date." 

Art. II. "... They declare that any disposition or 
measure which may tend to disturb the constitutional 
organization " [that is, the existing government] " of one 
of the Republics is to be deemed a menace to the peace 
of all." 

Art. III. *' Taking into accoimt the central geo- 
graphical position of Honduras, and the facilities which 
owing to this circumstance have made its territory most 
often the theater of Central American conflicts, Hondu- 
ras declares from now on its absolute neutrality in event 
of any conflict between the other repubhcs ; and the latter, 
in their turn, provided such neutrality be observed, bind 
themselves to respect it, and in no case to violate the 
Honduranean territory." 

Art. XVI. "... Desiring to prevent one of the 
most frequent causes of disturbances in the Republics, the 
contracting Governments shall not permit the leaders or 

^ Mr. Buchanan's report, with the text of the conventions, is printed in 
U. S. For. Rel., '07, pp. 665-723. 



212 THE FIVE REPUBLICS 

principal chiefs of political refugees, or their agents, to 
reside in the departments bordering on the countries 
whose peace they might disturb." 

Art. XVII. " Every person, no matter what his 
nationality, who, within the territory of one of the con- 
tracting parties, shall initiate or foster revolutionary 
movements against any of the others, shall be imme- 
diately brought to the capital of the Republic, where 
he shall be submitted to trial according to law." 

The other provisions of the treaty aimed to make the 
relations between the republics closer and more friendly, 
and to foster their co-operation for the furthering of their 
mutual interests. It provided for a reciprocal recogni- 
tion of the validity of judicial proceedings, professional 
degrees, patents, and copyrights. Citizens of each coun- 
try, residing in the territory of one of the others, were 
to enjoy the same privileges as nationals of the latter, 
and were to be considered as citizens of the latter if they 
fulfilled other constitutional requirements. Each Repub- 
lic pledged itself to accredit a permanent legation to each 
of the others, and agreed that its diplomatic and consular 
agents in foreign countries should afford the same pro- 
tection to the persons, ships, and properties of the citizens 
of other Central American states as to their compatriots. 
Vessels of any Central American state were to receive 
the same treatment as national vessels in the ports of 
others, and an agreement was to be entered into for the 
encouragement by subsidies of the coasting trade and of 
foreign steamship connections. The establishment of a 
practical agricultural school in Salvador, a school of 
mines and mechanics in Honduras, and one of arts and 
trades in Nicaragua, as well as the proposed pedagogical 
institute in Costa Rica and the Central American Bureau 
in Guatemala, was recommended, although not specifi- 
cally provided for. 

An additional convention to the General Treaty con- 



OF CENTRAL AMERICA 213 

tained radical and rather impractical provisions aiming 
to make revolutions less frequent: 

Art. I. " The Governments of the High Contracting 
Parties shall not recognize any other Government which 
may come into power in any of the five Republics as a 
consequence of a coup d'etat, or of a revolution against 
a recognized government, so long as the freely elected 
representatives of the people thereof have not constitu- 
tionally reorganized the country." 

Art. II. " No Government of Central America shall 
in case of civil war intervene in favor of or against the 
Government of the country where the struggle takes 
place." 

Art. III. " The Governments of Central America, in 
the first place, are recommended to endeavor to bring 
about, by the means at their command, a constitutional 
reform in the sense of prohibiting the re-election of the 
President of a Republic, where such prohibition does 
not exist; secondly, to adopt all measures necessary to 
effect a complete guarantee of the principle of alterna- 
tion in power." 

Another convention established a Central American 
Court of Justice, consisting of five judges, one to be 
elected by the legislature of each state. To this tribunal, 
the five republics bound themselves " to submit all con- 
troversies or questions which may arise among them, of 
whatever nature and no matter what their origin may be, 
in case the respective Departments of Foreign Affairs 
shall not have been able to reach an understanding." The 
Court was also to take cognizance of suits which citizens 
of one of the contracting parties might bring against the 
government of one of the others on account of violation 
of treaties or denial of justice and of the other cases of 
an international character, including those which two or 
more of the Central American governments, or one of 



214 THE FIVE REPUBLICS 

them and a foreign government, might agree to submit 
to it. It was to be " competent to determine its own 
jurisdiction, interpreting the Treaties and Conventions 
germane to the matter in dispute, and applying 
the principles of international law." Article XIII 
provided: 

" From the moment in which any suit is instituted 
against any one or more governments up to that in 
which a final decision has been pronounced, the Court 
may at the soHcitation of any one of the parties fix the 
situation in which the contending parties must remain, to 
the end that the difiiculty shall not be aggravated and 
that things shall be conserved in statu quo pending a 
final decision." 

In the exercise of its duties, the Court might address 
itself to the governments or the tribunals of the respec- 
tive states, to have its orders carried out, or it might 
provide for securing their execution through special 
commissioners, whom the parties were to assist in every 
way possible. The latter solemnly bound themselves 
to submit to the judgments of the Court, and agreed 
" to lend all moral support that may be necessary in 
order that they may be properly fulfilled." 

Every effort was made to secure the complete inde- 
pendence of the Court. It was to sit at Cartago, Costa 
Rica,^ where it would be more free from political or 
personal pressure than in some other parts of the Isth- 
mus. The judges were to serve for five years, receiving 
a fixed salary paid out of the treasury of the Court, to 
which each state contributed, and enjoying the privileges 
and immunities of diplomatic agents; and they were not 
to exercise their profession or hold public office during 
their term of service. They were not to consider them- 

^ After the destruction of Cartago by an earthquake in 1910 it was 
moved to San Jos6. 



OF CENTRAL AMERICA 215 

selves barred from sitting in a case to which their own 
governments were parties, for they were to represent, not 
the individual states, but the "national conscience of 
Central America." 

An additional article proposed to give the Court 
" jurisdiction over the conflicts which may arise between 
the Legislative, Executive, and Judicial powers — when 
as a matter of fact the judicial decisions and the resolu- 
tions of the National Congress are not respected." This 
provision, which would have authorized the tribunal to 
intervene in the internal affairs of the contracting powers 
in times of internal disorder, was never ratified. 

The Convention which estabhshed the Central Ameri- 
can Bureau recognized certain interests as being " those 
to which special attention should be paid." These were: 
*'the peaceful reorganization of their mother country, 
Central America"; the establishment of a broad, prac- 
tical, and complete system of education of an essentially 
Central American character; the development of com- 
merce and the advancement of agriculture and industry; 
and the uniformity of civil, commercial, and criminal 
legislation, customs tariffs, and monetary systems. The 
functions of the Bureau were to be all those considered 
necessary and expedient to achieve the objects placed in 
its care. It was to have an organ of publicity, and was 
to serve as a center for the distribution of information 
about Central American conditions both in the Isthmus 
and in foreign countries. 

At the same time, several other conventions were 
signed. One provided for the extradition of criminals; 
another for the establishment of a pedagogical institute 
directed by the government of Costa Rica but supported 
by aU of the others ; another for the co-operation of the 
^ve countries in making plans for the construction of 
the Central American sections of the Pan American 
railway and the improvement of other means of inter- 
communication. By still another treaty, each of the 



216 THE FIVE REPUBLICS 

contracting governments obligated itself to name one 
or more commissions to study the currency systems, 
customs tariffs, weights and measures, and other matters 
of an economic and fiscal nature in their respective coun- 
tries. After these had reported, delegates were to be 
appointed to a Central American Conference, which was 
to discuss the measures recommended by the commis- 
sioners, and especially the reform of the various cur- 
rency systems on a gold basis. Similar conferences were 
to be held annually thereafter to consider matters which 
the governments might agree to submit to them. 

The Conference's program for the political and eco- 
nomic regeneration of the Isthmus was obviously too 
ambitious to be carried out at once, for evils arising from 
deep-rooted habits and fundamental social conditions 
could not be done away with by mere international agree- 
ment, however sincere the contracting parties might be 
in their desire for peace and for a realization of a closer 
union. No one could reasonably expect that the five 
governments would turn at once from their attitude of 
mutual suspicion and hostility to a harmonious co-opera- 
tion in undertakings for their common welfare. Neither 
of the two main objects of the Washington Conventions, 
— the elimination of civil and international wars and the 
creation of closer ties between the five republics with a 
view to uniting them eventually under one government, — 
seemed to have been realized to any appreciable extent 
in the years immediately following 1907, and this led 
many who had hoped that there would at once be a 
marked improvement in international relations to brand 
the treaties as a failure. A careful examination of their 
results, however, shows that the treaties have been very 
far from a failure, even though their effects have as yet 
only begun to make themselves felt. Both of the objects 
of the Conference have been realized to some extent, and 
there is every prospect that they will be realized more 
and more fully as time goes on. 



OF CENTRAL AMERICA 217 

At first, indeed, there was little change in the relations 
between the five republics. Some of the governments, 
and especially that of Nicaragua, showed little inclination 
to carry out the obligations of the conventions in good 
faith. President Zelaya, who already practically con- 
trolled Honduras through the Davila government, con- 
tinued his machinations against the tranquilhty of other 
neighboring states, directing his efforts mainly towards 
placing one of his own supporters in the presidency of 
Salvador. His open assistance to Prudencio Alfaro, who 
made repeated attempts to invade that repubhc in 1908 
and 1909, finally forced the United States to authorize 
the commanders of its naval vessels in Central American 
waters to use force to prevent the launching of filibuster- 
ing expeditions from Nicaraguan ports. "^ Zelaya's policy 
created a situation which was intolerable to Guatemala 
and Salvador, and soon convinced all who were interested 
in Central American affairs that he was the greatest 
obstacle to the establishment of permanent peace in the 
Isthmus. President Taft expressed this behef in his 
annual message to Congress in December, 1909, when 
he said: 

" Since the Washington Conventions of 1907 were 
communicated to the Government of the United States 
as a consulting and advising party, this Government has 
been almost continuously called upon by one or another, 
and in tiu-n by all of the five Central American republics, 
to exert itself for the maintenance of the conventions. 
Nearly every complaint has been against the Zelaya 
government of Nicaragua, which has kept Central 
America in constant tension and turmoil." 

In the early part of the summer of 1908, a band of 
revolutionists invaded Honduras from Salvador, and 

' See the article by Professor P. M. Brown, at the time U. S. Minister 
to Honduras, in the American Political Science Review, Vol. VI, Supple- 
ment, p. 160. 



218 Tin: y\VK iM^JMJin.ics 

another ]m\u]y led by Genernl Lee Christrnas, an Amer- 
ican soldiei- of fortune, attactked some of the towns on 
the iKulIi eojist of tliat r-cpiihlic. There was h'ttle doubt 
ill Ihc iiiiiuis of well-informed people that one or both 
of Zelaya's prin(tipal enemies, tlie J'residents of Guate- 
mala and Salvjidor, were aiding the revolutionists with 
a view to striking jit liim throiigli the government of 
llondunis. Zeljiya. ;it onee ])repared Tor war, and tlie 
treaties of peace, hardly six months old, seemed to have 
been forgoMcii. 'I'he Uniled States and Mexico, how- 
ever, made strong represiMilations to all the parties con- 
cerned, and CvOsLi Kicji, by a haj)])y ins])iralion, sug- 
gested to tlie newly establislied Central Americ^an Court 
tli;il. il; interpose il;s inlhienee to ])revent the threatened 
conUict. On .Inly 8, this tribunal addressed a telegram 
to the presidents of Guatemala, Salvador, Honduras, 
and Nicaniguji, urging them to submit their diU'erences 
to arbitrntion. On receipt of this communication, Nica- 
nigua and Ifonduras nuide formal complaints to the 
Court in accordance witli the terms of the Washington 
Conventions, — Honduras charging that Guatemala and 
Salvador had fomented and assisted the revolution, and 
had failed to restrain ihc Iloiiduranean exiles residing 
in their territory, and jNicaragua a])pearing as an inter- 
ested party. The Court acted with ])romptness and 
decision. 'IMie compljiinants were asked to submit proofs 
in sn])port of their chnrges, and Guatemala, Salvador, 
jind Nicaragua, were ordered to refi-ain from any military 
movements which might suggest intervention in tlie inter- 
nal aifairs of Honduras, and to reduce their forces to 
a peace basis. These messages were transmitted and 
answer(Hl by telt^graph, so that within five days of the 
Court's iirst note a modus vivcndi had been estabhshed 
and the immediate danger of a conflict had been dis- 
pelled. After («ua tenia la, and Salvador com])lied with 
the orders of the Court, the revolution in Honduras sub- 
sided. The Court handed down its decision tui December 



OF CENTRAL AMERICA 219 

19, 1908. Salvador was absolved of all responsibility 
for the revolution in Honduras by the votes of the judges 
representing Salvador, Guatemala, and Costa Rica 
against those of the judges from Honduras and Nica- 
ragua. Guatemala was exonerated by all except the 
representative of Honduras. This decision was severely 
criticised by many persons in Central iVmerica, and it 
lost much of its force from the fact that most of the 
judges had obviously voted as the interests of the gov- 
ernments which named them dictated. There could be no 
doubt, however, that the Court had averted a general 
Central American war, and had thus done a signal 
service to the cause of peace.^ 

By this time it was clear that the Washington Con- 
ventions would have httle effect so long as Zelaya con- 
tinued to be president of Nicaragua, When a revolution 
broke out against him in the fall of 1909, therefore, it 
was regarded with more sympathy and favor by those 
who had been interested in the work of the Conference 
than was consistent with the spirit, at least, of the Con- 
ference's acts. The attitude of the United States and 
of the other Central American governments, as we shall 
see in the next chapter, did much to make this uprising 
a success. Zelaya's defeat naturally involved the fall of 
Da%'ila a short time afterward. 

After the elimination of Zelaya, the beneficial effects 
of the Conventions began to show themselves somewhat 
more than had been possible while the same conditions 
which had caused the disturbances of the years 1906-7 
had continued to exist. It became evident after 1910 
that they marked a turning point in the relations of the 
five republics. Since that year, and in fact, if we except 
occasional attempts to render covert aid to revolutions, 
since 1907, there has not been one international war in 
Central America. It would be difficult to point to an- 

' For an account of the case, in addition to ttie official report of the 
Court, see the Am. Journal of International Law, VoL II, p. 835. 



220 THE FIVE REPUBLICS 

other ten years in the history of the Isthmus of which 
this has been true. It is, moreover, hardly conceivable 
under present conditions, and especially in view of the 
influence exerted in behalf of peace by the United States, 
that there should be an armed conflict between two or 
more of the five republics. The principal object of the 
Washington Conference may therefore be said to have 
been realized. The change which has taken place has 
been in large part due to the fact that the five countries 
themselves have generally abided by the provisions of 
the Treaty of Amity and the Treaty establishing the 
Central American Court, for they have refrained from 
sending troops to intervene in one another's internal 
affairs, and have shown a readiness which had been rare 
before 1907 to submit differences which arose between 
[them to settlement by diplomatic means or arbitration 
rather than by a resort to arms. Their relations with one 
another have undoubtedly been improved by the new 
spirit which the Conference called into being, and their 
feeling of common nationality and their readiness to co- 
operate for the realization of their mutual purposes and 
ambitions have been strengthened by an increasing reali- 
zation of the external dangers which confront a Central 
America divided and distracted by internal wars. 

The Conventions did less to bring about stability of 
government in the individual states, but even in this their 
effect has been by no means negligible. Internal disor- 
ders cannot, of course, be done away with while their 
fundamental causes remain ; and the convention providing 
that governments coming into office by the use of force 
should not be recognized until after they had received 
the approval of the voters at a popular election, and that 
the state constitutions should be so amended as to insure 
alternation in power, have been entirely disregarded. 
Nevertheless, revolutionary uprisings have been made 
decidedly less frequent by the fact that several of the 
republics have faithfully observed their obligations to 



OF CENTRAL AMERICA 221 

exercise surveillance over political exiles from neighbor- 
ing countries and not to encourage or permit the organi- 
zation within their territories of attempts to overthrow 
nearby governments. Enemies of the estabhshed order 
in one of the republics now find it far more difficult than 
ever before to secure the base of operations and the 
financial and military assistance which are usually indis- 
pensable for the success of a revolt. 

The measure of success which the work of the Confer- 
ence has attained has been very largely due to the ener- 
getic support by the United States of the principles 
which it estabhshed. The government at Washington 
has several times intervened diplomatically, or even by 
the use of force, to prevent violations of the more impor- 
tant conventions, to which it was practically, if not for- 
mally, a party. In doing this, it has usually acted upon 
the invitation of one or the other of the five republics. It 
has not hesitated to use any means necessary to prevent 
unjustified attacks by one country on another, and it has 
often brought strong pressure to bear to deter the sig- 
natory powers from permitting their territory to be used 
as a base of revolutionary operations against their neigh- 
bors. Sometimes North American influence has appar- 
ently been the only factor which has secured respect for 
the obhgations imposed by the peace treaty, for one or 
two of the parties which signed that treaty have shown 
little disposition to abide by its provisions and have thus 
endangered the peace of the Isthmus despite the fact that 
their neighbors were endeavoring to carry out the pro- 
visions of the Conventions in good faith. 

The Central American Court of Justice, which was 
to have been the crowning work of the Conference, has 
not entirely fulfilled the expectations of its founders. It 
cannot be said to be a tribunal independent of and superior 
to the five governments, to which any aggrieved person 
or state may appeal in the confidence of securing justice. 
Several of the men appointed as judges have been dis- 



222 THE FIVE REPUBLICS 

tinguished lawyers of conspicuous ability and undoubted 
integrity, but at the same time there have been others, 
sometimes constituting the majority of the Court, who 
have owed their nominations purely to domestic political 
considerations. The honor and the large salary attached 
to them have made the judgeships one of the most attrac- 
tive positions in the gift of the state governments, and 
there has consequently been a keen competition for them 
among prominent politicians, which has made it more 
difficult to select a man solely on his merits. In addition 
to this, the importance of controlhng the Court as a 
means of influencing the international politics of the 
Isthmus has made almost inevitable the appointment of 
men who could be relied upon to vote as their govern- 
ments wished when important questions were at issue. 
The control exerted over the judges by the powers which 
named them has prevented the Court from becoming 
in any true sense independent, and has given it the 
position of a standing commission of distinguished diplo- 
mats rather than that of a true court of justice. This 
was perhaps inevitable, because the states of the Isthmus, 
which had never known a judicial tribunal not subject 
in some degree at least to official influence, could hardly 
grasp the idea of an international body which would be 
entirely free from the dictation of the authority which 
created it. There has been, therefore, no strong force 
of public opinion to support the Court in asserting its 
right to speak for the " National Conscience of Central 
America," and even the judges themselves have shown 
httle inclination to seize and hold the position of com- 
plete freedom from control with which the Washington 
Conference had intended to invest them. 

That this was true was evident in the first case that 
was brought before the tribunal. In deciding the suit 
of Honduras and Nicaragua against Guatemala and 
Salvador in 1908, each of the judges from the four 
states interested voted, as we have seen, on the side sup- 



OF CENTRAL AMERICA 223 

ported by the country which had appointed him. The 
general belief that the dictation of the governments 
involved, rather than the facts as shown by the evidence, 
had determined the decision of this question, did much 
to injure the Court and to deprive it of public confi- 
dence. Its independence suffered another serious blow 
as the result of the action taken in another question 
which arose three years later after the revolution in 
Nicaragua. The government which succeeded Zelaya 
failed to contribute its share towards the expenses of the 
Court, in which the judge appointed by the late admin- 
istration was still sitting. Now the salaries of the judges, 
according to the convention founding the tribunal, were 
to be paid out of the latter's treasury, from a general 
fund to which each of the states contributed. In this 
way the Conference had hoped to establish the financial 
independence of the judges with respect to their govern- 
ments, but its intention does not seem to have been car- 
ried out, for the refusal of Nicaragua to contribute her 
quota was regarded as the equivalent of withholding her 
judge's salary. The latter was thus forced to withdraw 
temporarily from the Court, whereupon that body, in- 
stead of calling upon the substitute provided by its con- 
stitution, admitted a new magistrate appointed by the 
Conservative government of Nicaragua. This action 
entirely disillusioned those who had hoped that the Court 
would be above party politics and independent of out- 
side pressure, for it established the dependence of the 
judges on the governments that named them, and con- 
stituted a recognition by the tribunal itself of the fact 
that its members were representatives of the administra- 
tion in power in their respective countries, rather than 
magistrates whose tenure was secure without regard to 
political changes during their legal term of ofiice. 

Since its action in averting a general war in 1908, the 
Court has been more ornamental than useful. It has 
served as a symbol of Central American unity, and it 



224 THE FIVE REPUBLICS 

has kept alive the principle of international arbitration, 
but it has actually decided very few cases. Three or four 
suits have been brought against the government of one 
of the countries by citizens of another, charging violation 
of treaty rights or denial of justice, but the Court has 
refused in every instance to adjudicate them, on the 
ground that the petitioners had not exhausted the means 
of redress at their disposal in the countries where they 
claimed that they had been mistreated. It also refused 
to intervene in the internal affairs of Costa Rica in 1914 
to determine the validity of a presidential election. Dur- 
ing the two revolutions in Nicaragua, in 1910 and 1912, 
it endeavored to bring about an agreement between the 
contending factions, and in 1912 it even sent a commis- 
sion of its members to confer with the rival leaders; but 
its efforts came to naught in both cases because the Con- 
servatives, who had the moral support of the United 
States, were confident of their ability to defeat their 
opponents, and therefore refused to agree to a com- 
promise. 

Its most recent, and in many ways its most important 
decisions, were those handed down on September 30, 
1916, and March 2, 1917, in the suits brought against 
Nicaragua by Costa Rica and Salvador, which claimed 
that their rights had been violated by the recent treaty 
between that country and the United States. The Court 
refused to declare the treaty void, saying that it had no 
jurisdiction over the United States, but it held, never- 
[theless, that the complainants' rights had been violated, 
thus condemning Nicaragua's action as illegal. This case 
has raised a very serious question as to the extent to 
which the authority of the tribunal will be recognized. 
Despite Nicaragua's refusal to appear as a party to the 
case or to accept the verdict, there can be no doubt that 
the Court had jurisdiction over the question at issue, or 
that Nicaragua is bound, by the Washington Conven- 
tions, to respect its decision. Whether she will do so. 



OF CENTRAL AMERICA 225 

however, seems very doubtful. If she continues in her 
refusal, and is supported in her attitude by the Govern- 
ment of the United States, the prestige of the Court will 
be seriously impaired, if, indeed, its very existence is 
not endangered. It is already rather unpopular because 
of the expense which it involves and because it has accom- 
plished so little, and it seems probable that it would have 
been disbanded before this if the United States had not 
exerted a strong influence in behalf of its continuance. 

The measures planned by the Conference for promot- 
ing closer economic relations between the five repubhcs 
have only been carried out in part, and their results have 
been far from satisfactory. Although the provisions for 
granting citizens of each Central American state the 
rights of citizens in all the others, and the mutual recog- 
nition of professional degrees, patents, and copyrights, 
have undoubtedly done much to encourage travel and 
commerce and to promote good feeling, the more ambi- 
tious projects outlined in the Conventions have been 
almost, if not quite, fruitless. Few of the educational 
institutions which the Conference contemplated have 
been estabhshed, and those which individual states have 
founded as a result of its recommendations have not 
attained a truly international character because of the 
reluctance of other governments to appropriate money 
for their support. The Central American conferences 
met annually for five years, drawing up conventions for 
the reform of the currencj'- and fiscal systems, the estab- 
lishment of free trade, the adoption of a comprehensive 
unified system of education, and the improvement of 
interstate communications; but they were finally discon- 
tinued because none of their work had been given 
any practical effect by the governments. The Central 
American Bureau (Oficina Internacional Centroameri- 
cana) has perhaps been the only institution provided for 
at the meeting in 1907 which has thus far fully justified 
its creation. This office, which has been sort of a clearing 



226 REPUBLICS OF CENTRAL AMERICA 

house for statistical and other data, has done much useful 
work in distributing commercial information in Central 
America and abroad, and has also served as an interna- 
tional agency for elaborating plans for joint action on 
subjects of general importance. Its organ, '* Centro 
America," is the most important periodical pubHshed 
in the Isthmus. 

It is still too early to attempt a final estimate of the 
results of the Washington Conference, or to judge of 
the ultimate economic and political eifects of its work. 
Some of the stipulations of the conventions adopted by 
it have never been carried out, and others have been 
rendered obsolete by the events of the last ten years, but 
in the main the agreements entered into are still in force, 
and are by no means without practical value. The pro- 
visions restraining the states from interfering in one 
another's afi:*airs and binding them to submit their dis- 
putes to arbitration cannot but make a great change in 
the political conditions of the Isthmus, if the five coim- 
tries continue to observe them and if the L^nited States 
continues to exert its influence to secirre respect for them. 
The spirit of Central American imity, which inspired the 
actions of the Conference, is growing stronger daily as 
the states realize more fidly their dependence upon one 
another and the importance of presenting a united front 
to the world. It seems not improbable that the meeting 
in Washington in 190T will be looked back upon in the 
futiu-e as a tinning point in the history of the Isthmus, 
marking a first and decisive step towards the elimination 
of the international and internal wars which had hitherto 
been so frequent and so destructive. 



CHAPTER XI 

THE INTERVENTION OF THE UNITED 
STATES IN NICARAGUA 

The Revolution of 1909— Attitude of the United States—Victory of the 
Conservatives — Financial and Political Difficulties Confronting the New Gov- 
ernment — The Dawson Agreement and the Loan Treaty — Reform of the 
Currency, Establishment of the Customs CoUectorship, and Reorganization 
of the Foreign Debt by the American Bankers — The Joint Claims Com- 
mission — Failure of the Loan Treaty — The Revolution of 1912 and the Inter- 
vention of the United States — Support of the Government Since 1912 by 
American Marines — New Loans and Purchase of the Railroad and Bank 
'Stock by the Bankers — The Election of 1916 — The Canal Treaty — Objections 
of Costa Rica and Salvador — Decision of the Central American Court — 
Opposition to Our Policy in Nicaragua and the Influence of Our Policy on Our 
Relations with the Other Central American States. 

In October, 1909, a band of Nicaraguan Conservatives 
started a revolution at Bluefields. They won over Juan 
J. Estrada, the governor of the province of which that 
city is the capital, by proclaiming him provisional presi- 
dent, and thus secured control of most of the East Coast 
of the Republic. Money and supplies were obtained 
from some of the other Central American countries, and 
also from the foreign colony on the Coast, whose inter- 
ests had been injured by certain concessions which 
President Zelaya had recently granted. This assistance, 
and the protection afforded by the wild country which 
separated Bluefields from the rest of the Republic, 
enabled the revolutionists to raise a considerable army 
and to organize a de facto government before the con- 
stituted authorities were able to attack them. 

The uprising was from the first regarded with sym- 
pathy throughout Central America and in Washington, 
for Zelaya's continual encouragement of revolutions in 
other countries had made him obnoxious to all of his 
neighbors, and had led to a general belief that his admin- 

227 



228 THE FIVE REPUBLICS 

istration was the principal obstacle to the establishment 
of peace in the Isthmus. The relations between Nica- 
ragua and the United States had been strained for some 
time, because of the friction caused by Zelaya's viola- 
tions of the Washington Conventions, and because there 
had been a number of unpleasant diplomatic incidents, 
including the prolonged dispute over the so-called Emery 
claim,^ which had culminated in the withdrawal of the 
American minister from Managua. Nevertheless, both 
the United States and the other Central American coun- 
tries remained at first ostensibly neutral in the contest. 
In November, however, the execution by Zelaya's troops 
of two American soldiers of fortune, who held commis- 
sions in the revolutionary army, caused President Taft 
to break off diplomatic relations with the Liberal admin- 
istration entirely, and to give the revolution his open, if 
indirect, support. 

The attitude of the American government was set 
forth in a note addressed by Secretary of State Knox 
to the Nicaraguan Charge d' Affaires at Washington. 
" Since the Washington Conference of 1907," it stated, 
" it is notorious that President Zelaya has almost con- 
tinuously kept Central America in tension and turmoil." 
The Liberal administration was described as " a regime 
which unfortunately has been a blot upon the history 
of Nicaragua." The murder of American citizens was 
but the culmination of a series of outrages which had 
made friendly relations between the two governments 
impossible. Moreover, the United States was convinced 
" that the revolution represents the ideals and the will 
of a majority of the Nicaraguan people more faithfully 
than does the Government of President Zelaya." The 
revolution, the Secretary said, had already attained seri- 
ous proportions on the East Coast, and new uprisings 
were reported in the West. This tended to produce " a 
condition of anarchy which leaves, at a given time, no 

^ See U. S. Foreign Relations, 1909, under Nicaragua. 



OF CENTRAL AMERICA 229 

definite, responsible source to which the Government of 
the United States could look for reparation for the kill- 
ing of Messrs. Cannon and Groce, or indeed, for the 
protection which must be assured American citizens and 
American interests in Nicaragua. In these circum- 
stances, the President no longer feels for the Government 
of President Zelaya that respect and confidence which 
would make it appropriate hereafter to maintain with it 
regular diplomatic relations, implying the will and the 
ability to respect and assure what is due from one state 
to another." Both factions were to be held responsible 
for the protection of American life and property in the 
sections under their control. The United States would 
wait, before demanding reparation for the murders, until 
it saw whether or not the government which was in power 
after the revolution was " entirely dissociated from the 
present intolerable conditions." Meanwhile it reserved 
the liberty to take such action as it saw fit to preserve 
its interests, and the State Department would continue 
to receive unofiicially both the former Charge d'Aff aires 
and the representative of the revolution.^ 

This note brought about Zelaya's fall, for he realized 
that he could not hope to maintain himself against the 
open opposition of the United States. After vainly 
attempting to come to an understanding with Secretary 
Knox, the Nicaraguan ruler yielded to the advice of 
President Diaz of Mexico and to the pleas of his friends 
at home, and resigned his position to Dr. Jose Madriz, 
one of the most distinguished citizens of Leon. The 
Liberals had hoped to placate the United States by 
making president a civilian of known ability and honesty, 
but their expectations were disappointed, for President 
Taft refused to recognize the new executive.^ The revo- 

^ For the text of the note, see U. S. Foreign Relations, 1910, p. 455. 

* The events leading up to Zelaya's fall are discussed in U. S. Foreign 
Relations, 1909, President Taft's message to Congress on Foreign Relations, 
December, 1909, and Zelaya's book, "La Bevolucidn de Nicaragua y Los 
Estados Unidos." 



230 THE FIVE REPUBLICS 

lutionists also declined his offer to open peace negotia- 
tions. 

For a time, nevertheless, it appeared probable that 
President Madriz would be able to restore order. On Feb- 
ruary 22, 1910, a revolutionary army which attempted to 
invade the lake region was defeated and almost destroyed, 
and Estrada and the other leaders, with the remnants 
of their troops, were forced to retire to Bluefields. The 
government at once prepared to attack that city vigor- 
ously by land and by sea, proclaiming a blockade of the 
port, and occupying the Bluff, where the customs house 
was situated. The final reduction of the rebel army, 
however, proved impossible. The officers of the American 
warships, which had been sent to the port at the outbreak 
of the war, refused to allow the blockading squadron to in- 
terfere with American ships or ships carrying American 
goods, and denied the right of the Government ofiicials to 
collect customs duties at the Bluff, permitting Estrada to 
estabhsh a new customs house in the territory under his 
control. When the Liberal commanders, thus prevented 
from cutting off the supphes or the revenues of the in- 
surgents, prepared to take the town by assault, the 
American commander forbade them to attack it from 
the land side, and threatened to sink the gunboats if 
they shelled the rebel trenches. This action, taken on the 
ground that a bombardment or fighting in the streets 
would destroy the property of Americans and other for- 
eigners, rendered certain the defeat of the Government 
army, which could not long remain encamped far from 
its base of supplies in the hot and imhealthful coast dis- 
trict outside of the city. Within a few weeks the besieg- 
ers were forced to withdraw into the interior. 

The Liberals in control at the capital, who had akeady 
lost the sympathy of many of Zelaya's former supporters 
by their wholesale political arrests and their partisan 
policy, were completely discredited by their failure to 
take Bluefields, and their government collapsed entirely 



OF CENTRAL AMERICA 231 

when Estrada again approached the interior with a re- 
inforced army. There were new outbreaks at several 
points in the lake region which it was impossible to sup- 
press. Madriz left Managua on August 20, 1910, 
and the revolutionists entered the city on the following 
day. 

The revolutionary forces were composed mainly of 
adherents of the wealthy Conservative families of Gra- 
nada, but there were also many Liberals, some of whom 
had been prominent leaders in the revolt, who had joined 
the uprising either from personal hostility to Zelaya or 
from the hope of gaining something for themselves. The 
new provisional president, Juan J. Estrada, was a mem- 
ber of the artisan class of Managua, who had been raised 
by Zelaya to the position of governor of the East Coast 
province, and whose leadership had been accepted by the 
Conservatives only because the success of their plot at 
the beginning depended upon his betraying his patron 
and turning over to them the garrison at Bluefields. 
Another Liberal, General Jose Maria Moncada, who 
had for several years been an opponent of Zelaya, became 
minister of gobernacion in the new government, and was 
one of the most trusted advisors of the provisional 
president. The minister of war, General Luis Mena, 
had formerly been a follower of the Chamorro family, 
but his miHtary exploits during the recent struggle and 
his influence with the army had given him a prestige 
which threatened to echpse that of his former patrons, 
and had made him the most powerful figure in the admin- 
istration. None of these men were liked or trusted by 
the old Granada aristocracy, who had hoped through the 
success of the revolution to regain the power which they 
had enjoyed during the thirty years before Zelaya became 
president. Even the GranadinoSj however, were not 
entirely united among themselves, for there was no little 
jealousy between some of the great families. General 
Emiliano Chamorro, who had for many years been the 



232 THE FIVE REPUBLICS 

leader of Conservative revolts against Zelaya, had a 
strong following among the members of his party in 
all sections of the Republic, but he was opposed by a 
faction headed by the Cuadra family, who subsequently 
became very powerful through their alliance with Presi- 
dent Adolfo Diaz. It is necessary to bear in mind these 
rivalries between the different leaders and groups in the 
new administration, in order to understand the political 
difficulties which confronted it during the two years fol- 
lowing its accession to power. 

The agreement by which the Liberals had turned over 
the government to the revolutionary leaders had pro- 
vided for a general amnesty, for a free election to be held 
within one year, and for the recognition of the debts 
contracted by both parties during the struggle. Little 
or no attention was paid to the two former articles, but 
the debts of both parties, — to members of the revolu- 
tionary forces, — were fully recognized, and, in so far as 
the condition of the treasury permitted, paid. Each per- 
son who had taken part in the revolt received fifty 
hectares (about 123 acres) of the national lands, and 
vast sums were awarded to prominent members of the 
Conservative party who had suffered under the Zelaya 
regime from confiscation or forced loans, or even from 
"moral" injuries, such as the death of a close relative. 
A large sum which had been left in the treasury by Dr. 
Madriz was soon exhausted, and new issues of unsecured 
paper money were resorted to. By April, 1911, the 
government admitted that the already depreciated cur- 
rency had been further inflated to the extent of 15,000,- 
000 pesos, and in the autumn of the same year 10,000,000 
pesos more were secretly put into circulation.^ Some of 
this money was necessarily used to meet the current ex- 
penses of the government, for the revenues had suffered 
a serious decline since the revolution, but the greater 

^ See Messrs. Harrison and Conant's Report Presenting a Plan of 
Monetary Reform for Nicaragua, pp. 10, 11. 



OF CENTRAL AMERICA 233 

part seems to have gone to those in power and to their 
friends and relatives. 

The emptiness of the treasury, accompanied by the 
inflation of the currency to twice its former quantity, 
made worse the already desperate economic situation of 
the country. The revolution had paralyzed agriculture 
and commerce, not only by taking thousands of workers 
away from their fields and shops, but also by the actual 
destruction of cattle and crops, and by the complete dis- 
organization of the transportation system. The discon- 
tent caused by these conditions made the position of the 
new government very precarious, for the Liberals, who 
outnumbered the Conservatives in the country at large, 
had no intention of accepting their defeat as final. They 
felt that they had been beaten, not through the superior 
strength of their enemies, but by the intervention of the 
United States; and they were encouraged to keep up an 
active opposition to the government by the hope of re- 
turning to power through the dissensions which soon ap- 
peared among the different chiefs of the Conservative 
party. The opposition press, which for a few months 
enjoyed and abused an unwonted liberty, kept party 
feeling at the boihng point, and the bitterness between 
the two factions was greatly intensified by a bloody clash 
between government troops and the members of a peace- 
ful Liberal parade at Leon in November, 1911. The 
Conservative administration, bankrupt and divided within 
itself, seemed for a time utterly unable to cope with the 
situation. 

The Repubhc was saved from falHng into a condition 
of complete anarchy only by the assistance rendered 
to the new government by the United States. In 
October, 1910, the State Department sent Mr. Thomas 
C. Dawson to Managua to study the situation and to 
bring about an understanding between the Conservative 
leaders. Through his good offices, the so-called Dawson 
agreement was signed on November 5 by the principal 



234 THE FIVE REPUBLICS 

leaders of the revolution. This arrangement provided 
for tlie continuance of Estrada at the head of the gov- 
ernment, for the appointment of a commission contain- 
ing American members to pass on all claims against the 
government arising out of the recent war and out of the 
cancellation of concessions granted by Zelaya, and for 
the negotiation of a loan treaty in the United States/ 
A constitutional convention which met on December 31 
elected Estrada provisional president for two years, and 
Adolfo Diaz vice-president. The new administration 
was at once officially recognized by the United States. 

Estrada's position was by no means an easy one. He 
could rely neither upon the military power, which was 
entirely in the hands of General Mena, nor upon the 
Constitutional Convention, which was composed chiefly 
of followers of Emihano Chamorro. The rival ambi- 
tions of the diiferent leaders soon broke down the 
pohtical arrangements estabhshed by the Dawson agree- 
ment. When the Convention framed a constitution 
which would have made itself rather than the president 
the actual authority in the state, Estrada dissolved it, 
thus breaking with Chamorro, who left the country. 
Estrada later attempted to remove from office and 
imprison General Mena, who had used his control of 
the army to fill a new constituent assembly with his 
personal followers. The military leaders remained loyal 
to their chief, and prepared to secure his release by 
force. Only the intervention of the United States 
minister averted fighting in the streets of Managua. 
Estrada and Moncada, the minister of gohernacion, 
resigned, and Diaz succeeded to the presidency, with 
the consent of Mena. The minister of war was for 
some months the real head of the government. 

Meanwhile the plans for the financial reorganization 
of the Republic, which had also been a part of the 
Dawson agreement, had assumed definite form. Early 

*See U. S. Foreign Relations, 1910, pp. 764-6. 



OF CENTRAL AMERICA 235 

in 1911, a study of the situation had been made by a 
financial advisor appointed by Estrada at the suggestion 
of the State Department. The pecuniary difficulties 
which confronted the new government were growing 
very serious. Foreign creditors, supported by their 
governments, were urgently demanding the payment of 
interest on the bonded debt, and several claimants were 
seeking compensation for concessions which the revolu- 
tionists had cancelled or violated. The treasury was 
practically empty, and the repeated issues of paper 
money which had been resorted to to provide funds had 
disorganized the currency to such an extent that fluc- 
tuations in the rate of exchange made foreign commerce 
almost impossible.^ 

On June 6, 1911, a treaty was signed with the United 
States, by which that country agreed to assist Nicaragua 
in securing a loan from American bankers for the con- 
solidation of its internal and external debt and for other 
purposes. The loan was to be secured by the customs 
duties, which were to be collected, so long as the bonds 
remained unpaid, by an official appointed by Nicaragua 
from a list presented by the fiscal agent of the loan 
and approved by the President of the United States.^ 
The treaty was similar in every way to that signed in 
January of the same year by the United States and 
Honduras, and, like it, was never ratified by the United 
States Senate. On September 1, while it was still under 
consideration by the Senate, contracts were signed by 
which Brown Brothers and Company and J. and W. 
Sehgman and Company, of New York, agreed to lend 
the Republic fifteen milHon dollars when the treaty went 
into effect. The bankers were to purchase the Republic's 
bonds, bearing five per cent interest, at 90^ per cent 
of their face value, and the money thus received was to 

' The rate of exchange rose from 913% in December, 1909, to 2,000% 
at the end of 1911. See the Report of Messrs. Conant and Harrison, p. 15. 

* The text of the treaty is printed in the Americal Journal of Inter- 
national Law, 1911, Supplement, p. 291. 



236 THE FIVE REPUBLICS 

be employed for the reform of the currency, the con- 
struction of railroads from the interior to Matagalpa 
and to the Atlantic Coast, and the refunding of the 
external and the internal debts. As there was little 
hope of immediate action on the loan treaty, for the 
United States Congress had adjourned, the bankers 
agreed to purchase of the Republic six per cent treasury 
bills to the amount of $1,500,000, in order to provide 
funds for the most needed reform, an immediate re- 
organization of the currency. These were guaranteed 
by the customs revenues, which were to be administered 
until the notes were retired by a collector general desig- 
nated by the bankers. The Republic agreed that any 
dispute relating to this contract should be referred to 
the Secretary of State of the United States for final 
decision. The treasury bills were to be retired at once 
if the fifteen-million-dollar bond issue took place.^ 

The product of this loan was spent by the bankers 
for the benefit of the Republic. The reorganization of 
the monetary system was intrusted to the National Bank 
of Nicaragua, an institution incorporated in the United 
States with capital supphed from the loan. This was 
to be managed by the bankers until such time as the 
treasury bills should be paid. On March 20, 1912, a 
new currency law was passed by the Nicaraguan Con- 
gress, putting into effect a plan which had been worked 
out by two distinguished American financial experts, 
who had been sent by the bankers to report on the 
situation.^ A unit called Cordoba, equal in value 
to one dollar United States currency, was instituted, 
and the National Bank was authorized to issue paper 
and silver money of the new denominations in such 
quantities as it might consider expedient. This was to 

^ These and the later contracts between the bankers and the Nicaraguan 
Government have been published in the annual reports of the ministry of 
Hacienda y Credito Publico. 

= Their report was the above cited Report Presenting a Plan of Monetary 
Reform for Nicaragua. The Monetary Law is printed in the report, p. 71. 



OF CENTRAL AMERICA 237 

be exchanged for the old hilletes at a rate to be fixed 
by agreement between the President of Nicaragua and 
the bankers. The bank-notes which were to form the 
greater part of the new circulating medium were to be 
kept at par by the sale of drafts against a reserve 
fund maintained in New York by the Republic with its 
own money, but managed by the National Bank. The 
latter was to have full control of the currency reform 
as the agent of the Republic, and was to have an ex- 
clusive right to issue paper money. 

Meanwhile it had been found that additional funds 
would be necessary if the currency reform were to be 
carried out, because the secret issues of paper money 
made during the autumn of 1911, even after the signa- 
ture of the treasury bills agreement, had greatly in- 
creased the probable expense of the reform. The 
bankers therefore agreed to open a credit of $500,000 
to provide the reserve fund contemplated in the plan 
of reorganization, and agreed also to lend the Republic 
an additional $255,000 in small monthly amounts for 
current expenses. Both of these advances were to bear 
interest at the rate of six per cent, and were to be 
repaid when Nicaragua received the money which was 
due to it, as will be explained below, from the Ethelburga 
Syndicate. Payment was due on October 15, 1912, but 
the bankers agreed to grant an extension of time both 
for these loans and for the treasury bills, if the Republic 
were then unable to pay them. In return, the Republic 
agreed to cut down its budget and to raise the customs 
duties by collecting them at a new rate of exchange. 
At the same time, it granted the bankers an option on 
fifty-one per cent of the stock in the National Railway, 
the management of which was to be turned over to a 
corporation formed in the United States. This com- 
pany was to be entirely controlled by the bankers until 
they had received all money due them from the Republic. 

As soon as the plan for the currency reform was 



238 THE FIVE REPUBLICS 

completed the government began to purchase and destroy 
the old paper money, in order to reduce the rate of 
exchange, for the expert commission had decided that 
a conversion at the prevailing rate of twenty to one 
would work a serious injustice to some classes in the 
community in view of the rapidity with which the rate 
had risen during the past twelve months. This pro- 
ceeding, although justifiable from a broad social point 
of view, involved a heavy expense to the government, 
and at the same time proved extremely profitable to 
those who had shared in the distributions of paper money 
w^hich had taken place since the victory of the revolution. 
The National Bank was established in the summer of 
1912, and early in 1913 the new money was in circulation. 
The old billetes were gradually retired, being exchanged 
at a fixed rate of 12^ to one. In November, 1915, 
they ceased to be legal tender. 

Meanwhile the Customs Collectorship had been in- 
stalled in December, 1911, under the direction of Colonel 
Clifford D. Ham. This gentleman has administered 
the service ever since, in accordance with the terms of 
the treasury bills contract and of the later agreement 
with the holders of the Republic's foreign debt. The 
Collector General, in his own words, has regarded him- 
self not so much as an employee of the Nicaraguan 
Government as a " trustee, with obligations to foui* 
parties — the Repubhc of Nicaragua, the Secretary of 
State of the United States, certain citizens of the 
United States, and certain citizens of England." ^ In 
accordance with this view, he has decHned to recognize 
the right of the Tribunal of Accounts and other gov- 
ernmental agencies to exercise any authority over him, 
and he has been in the main supported in this position 
by the higher Nicaraguan officials. By the terms of its 
arrangements with the bankers, the Republic is debarred 
from reducing its tariff without the latters' consent, 

^ See his official report, December, 1914, p. 12. 



OF CENTKAL AMERICA 23a 

or from taking any other action which might lessen the 
value of the guarantee afforded by the customs revenues. 
The collectorship, and the readjustment of the foreign 
debt which its estabhshment made possible, may perhaps 
be said to be the one conspicuously successful feature of 
the American bankers' operations in Nicaragua. The 
Collector General, who has entire power to appoint and 
remove his subordinates, has reorganized and reformed 
the service, and has succeeded in eliminating most of the 
corruption and inefficiency which had prevailed under 
native administration. Foreign importers and customs 
agencies who had enjoyed special privileges or improper 
exemptions have in some cases opposed the new regime 
very bitterly, but the majority of the business men of 
the country have had good reason to welcome the sub- 
stitution of a fair system for one which exposed them 
to continual extortion and fraud. The amount of 
revenue secured, in proportion to the imports, has been 
greatly increased, although the paralyzation of trade 
during the war of 1912 and the commercial stagnation 
which has prevailed since the beginning of the European 
war have prevented the receipts from reaching an 
amount much greater than that secured in the days of 
Zelaya. Nevertheless, the collections during 1913, the 
only year since the estabhshment of the new system in 
which normal conditions prevailed, were the largest in 
the history of the Repubhc.^ 

Negotiations with the holders of the Republic's foreign 
debt were completed in the first months of 1912, when 
an arrangement highly beneficial to both parties was 

* The following table, compiled from the Reports of the Collector General 

for 1911-13 and 1915, shows the total receipts, reduced to American gold, 
for the years 1904-15: 

1904 a 910,627.27 1910 $ 854,547.29 

1905 1,282,246.86 1911 1,138,428.89 

1906 1,595,219.53 1912 1,265,615.13 

1907 1,246,844.85 1913 1,729,008.34 

1908 1,027,437.16 1914 1,234,633.54 

1909 976,554.15 1915 787,767.11 



240 THE FIVE REPUBLICS 

brought about by the American bankers, acting on 
behalf of the Nicaraguan Government. Zelaya had 
refunded the then existing foreign debt in 1909, by 
placing bonds to the amount of £1,250,000 at seventy- 
five per cent of their face value, bearing six per cent 
interest, with the Ethelburga Syndicate in London. As 
the service of this loan had been suspended after the 
revolution, and the British Government had already 
intervened diplomatically on behalf of the bondholders, 
the need for a readjustment had been pressing. A 
contract was signed on May 25, 1912, between the 
American bankers and the Corporation of Foreign 
Bondholders, by which the latter agreed to a reduction 
of the interest on the loan to five per cent, on condition 
that the interest and amortization charges be made a 
first lien on the customs receipts of the Republic, and 
that those receipts should continue to be collected under 
the control of the bankers. This agreement not only 
effected a saving in money and an improvement in the 
credit of the Repubhc, but it also secured for the gov- 
ernment the use of a sum of £371,000, representing part 
of the proceeds of the sale of the 1909 bonds, which 
had been held in London when the service of the loan 
had been suspended. About one-third of this money was 
used for the payment of interest already due, but the 
remainder was available, in accordance with an agree- 
ment made on the same date between the American 
bankers and the Republic, for the fortification of the 
currency reform and the repayment of a part of the 
obligations of the government to the bankers. 

The Claims Commission provided for by the Dawson 
agreement began its sessions on May 1, 1911. It was 
authorized by legislative decree to adjudicate without 
further appeal all unliquidated claims against the gov- 
ernment, including especially those arising from the late 
war and from the cancellation of concessions and other 
contracts made by former administrations. Of the three 



OF CENTRAL AMERICA 241 

commissioners, one was a Nicaraguan citizen appointed 
by the Nicaraguan Government and the other two were 
Americans, one named by the Republic on the recom- 
mendation of the United States and the other designated 
by the State Department. The commission continued 
its labors until late in 1914, and passed on 7,908 claims 
for a total of $13,808,161 gold. Its awards amounted 
to $1,840,432.31, about two-thirds of which was for 
small claims presented by natives. The American 
holders of concessions, who demanded $7,576,564.13, 
received only $538,749.71. The original intention had 
been to provide for the payment of these awards with 
the money received from the proposed fifteen-million- 
dollar bond issue. It was impossible after the failure 
of the loan treaty for the government to do this, but a 
simi of $158,548 was nevertheless provided from the 
customs receipts for the payment of 4,116 of the smallest 
claims, which were mainly for losses of livestock and 
similar property by poor persons during the civil wars 
of 1909-10 and 1912.^^ Even though the plan for the 
refunding of the internal debt could not be carried out, 
it was a decided advantage both for the government and 
for the holders of the claims to have them passed on by 
an impartial tribunal, in order that the former might 
know definitely how much it owed, and that the latter 
might secure the recognition of their claims as acknowl- 
edged obligations of the treasury. 

These measures had been carried out by the State 
Department, and by the bankers at the request and 
with the co-operation of the State Department, in antici- 
pation of the ratification of the loan treaty by the 
United States Senate. Their effect was practically to 
put into operation the most important features of that 
agreement, — the customs collectorship, the adjustment 

> For the work of the Commission, see the article by Mr. Schoenrich, 
one of its members, in the American Journal of International Law, Vol. 9, 
p. 958. 



242 THE FIVE REPUBLICS 

of the external debt, and the reform of the currency, — 
despite the opposition to the State Department's poHcy 
which defeated the treaty in the Senate. The rejection 
of the treaty, however, made it impossible to secure 
money for the complete execution of the reforms which 
had been inaugurated by the Treasury Bills Agreement, 
for the bankers were naturally unwilling to make the 
large loan which had been planned for without an ade- 
quate guarantee of the protection of their government. 
Their situation and that of the Republic was thus made 
very difficult. The foreign debt remained in English and 
French hands ; the creditors of the government at home re- 
mained unpaid; the projected railroads could not be built; 
and the general improvement in the condition of business 
and agriculture, which had been expected to result from 
the solution of the government's financial difficulties and 
the payment of its obhgations to planters, merchants, and 
officials, did not take place. The poor credit of the Re- 
public made it iaipossible for it to secure additional loans 
from the bankers except on onerous terms, while its 
pressing necessities forced it to embark on a hand-to- 
mouth policy of mortgaging or selling all of its available 
resources in order to secure funds. The bankers, on the 
other hand, had been drawn into a business which prom- 
ised little profit or credit to themselves, but from which 
they could not well withdraw. Instead of imderwriting 
a large bond issue, and aiding in an ambitious project 
for the economic regeneration of Nicaragua, as they had 
expected to when they first entered into the contracts of 
September, 1911, they have become involved deeper and 
deeper in the financial support of a virtually bankrupt 
government. 

While these financial operations were being carried out, 
the political situation had become more threatening than 
ever. General Mena had caused the Assembly to elect 
him President of the Repubhc, in October, 1911, for the 
term beginning January 1, 1913, notwithstanding the 



OF CENTRAL AMERICA 243 

protests of the United States Minister and of the 
Granada Conservatives, who asserted that this action 
was a violation of the Dawson agreement. The strength 
of the opposition to this proceeding encouraged President 
Diaz to attempt to throw off the control of the minister 
of war. On July 29, 1912, he summarily removed the 
latter from office, and appointed Emiliano Chamorro 
general-in-chief of the army. Mena fled to Masaya, 
with a large part of the troops and of the city police 
of the capital. Most of the national stores of artillery 
and ammunition had been gathered in Masaya and in 
Granada, where Mena's son was in command of the 
barracks. The revolutionists were reinforced by a 
large number of Liberals, for Benjamin Zeledon, for- 
merly minister of war under Zelaya, assumed the lead- 
ership of one of their armies, and the people of Leon 
revolted and seized control of that city and of the neigh- 
boring provinces. Mena's distrust of his old' enemies, 
however, and his refusal to send arms and ammunition to 
the Leon leaders, prevented effective co-operation be- 
tween the two factions, and probably saved the govern- 
ment from defeat. 

As it was, the government could not expect to hold 
out long, with little ammunition and few troops, while 
the rebels controlled practically all the approaches to the 
capital. The United States, however, could hardly per- 
mit the overthrow of the Conservative authorities. Mena, 
who had fallen seriously ill, had been forced to let the 
leadership of the revolution pass almost completely into 
the hands of Zeledon and the Leon chiefs. If Zelaya's 
followers regained control of the government, all of the 
efforts of the State Department to place Nicaragua on 
her feet pohtically and financially would have been use- 
less, and the interests of the New York bankers, who 
had undertaken their operations in the country at the 
express request of the United States Government, would 
be seriously imperiled. The American Minister, there- 



2U THE FIVE REPUBLICS 

fore, demanded that President Diaz guarantee effective 
protection to the hfe and property of foreigners in the 
Republic. The latter repHed that he was unable to do 
so, but asked the United States to assume this responsi- 
bihty itself. In compliance with this request, American 
marines landed at Corinto, and assumed control of the 
^N'ational Railway, which ran from that port through 
Leon, Managua, and Masaya to Granada. This, as we 
have seen, was the property of the government, but was 
held and operated by the bankers as a partial guarantee 
of their loans. By September 8, traffic had been resumed 
between Corinto and Granada, although the rebels still 
held all of the more important cities along the route with 
the exception of Managua. On September 18, the 
United States Minister, Mr. Weitzel, made public an 
official declaration that the United States intended to 
keep open the routes of communication in the Republic 
and to protect American life and property. His gov- 
ernment, he said, had been opposed to Zelaya not only 
as a person but as a system, and it would exert its in- 
fluence, at the request of President Diaz, to prevent a 
return to that system and to uphold the lawful authority. 
This pronouncement disheartened the revolutionists and 
caused many to withdraw from the uprising. On Sep- 
tember 25, General Mena surrendered at Granada to 
Admiral Sutherland, the commander of the American 
forces, and the rebels were confined to their positions at 
Masaya and Leon. A few days later. Admiral Suther- 
land ordered Zeledon to evacuate the Barranca Fort, 
overlooking Masaya, on the ground that his position 
threatened the railway. When the Liberal leader re- 
fused, American troops stormed and took the position. 
The war soon afterwards came to an end with the sur- 
render of Leon to another American officer. Seven 
American marines and bluejackets had lost their 
lives. ^ 

» Report of the Navy Department, 1912, p. 13. 



OF CENTRAL AMERICA 245 

After the revolution, it was necessary to decide upon 
the election of a president for the term 1913-1917. The 
greater part of the Conservative party supported the 
candidacy of General Chamorro, but Diaz, who con- 
trolled the machinery of the administration, desired to 
succeed himself in power. An agreement was effected 
through the intervention of Mr. Weitzel, who insisted 
that the Chamorristas accept Diaz, while Chamorro was 
given the position of minister at Washington. At the 
election, which was held while a large part of the Ameri- 
can marines were still in the country, the three or four 
thousand voters who were allowed to participate unani- 
mously approved the official ticket, which was the only 
one in the field. 

Since 1912, the Government of Nicaragua has practi- 
cally been maintained in office by the support of the 
United States, for a legation guard of one hundred 
marines is kept in one of the forts at Managua and a 
warship is stationed at Corinto as reminders that the 
United States will not permit another uprising against 
the constituted authorities. One hundred well-trained 
and well-equipped soldiers are in themselves no incon- 
siderable force in a country like Nicaragua, and their 
influence is increased by the recollection of the events of 
1912. Without their moral backing, the administration 
could hardly have remained in power. Although Presi- 
dent Diaz dealt with his opponents more justly and 
humanely than has been customary in Nicaragua, and 
showed great liberality in his attitude towards the ex- 
pression of political opinion in the press and in private 
conversation, his administration did not have the whole- 
hearted adherence of any of the larger political groups, 
and was for this reason decidedly unpopular. Not only 
the Liberals and the friends of General Mena, but even 
most of the Conservatives, were dissatisfied. General 
Chamorro himself co-operated loyally with the president, 
but he was unable to prevent many of his followers from 



246 THE FIVE REPUBLICS 

conspiring to place their own faction in power. There 
were, therefore, continual intrigues and frequent petty- 
revolts, which lessened the government's prestige and 
exhausted its energy and resources. The outbreak of 
another civil war was prevented, apparently, only by the 
determined attitude of the United States. 

Two of the causes which contributed most to the weak- 
ness of the Diaz government were its inability to meet 
its current expenses and the increasing unpopularity of 
its relations with the New York bankers. At the time 
of Mena's revolt, the difficulties confronting the treasury 
had seemed in a fair way to solution, but the expense 
and the loss of revenue due to the war made matters 
worse than ever. The government was forced to ask 
further advances from the bankers, and to turn over to 
them, as security, and in the hope of improving its finan- 
cial situation thereby, the collection of all of its internal 
revenues. ^ These were administered by the National 
Bank for a year, after which the arrangement was aban- 
doned as unsatisfactory, because of the difficulties encoun- 
tered by the American administrators in obtaining the 
enforcement of the fiscal laws and the prevention of 
the clandestine manufacture of aguardiente. It was re- 
ported in October, 1916, however, that the internal 
revenues had again been taken over by the bankers. 

As there was no improvement in the financial condi- 
tion of the Republic, contracts providing for further 
assistance by the bankers were signed on October 8, 
1913. The latter agreed to purchase another issue of 
treasury bills to the amount of one million dollars, bear- 
ing interest at six per cent, and at the same time bought 
fifty-one per cent of the stock of the National Railway 
for one million dollars, thus becoming the owners of 
property which they had in fact held and operated for 
more than a year. The Republic agreed to employ a 
part of the two million dollars thus received in the pay- 

* See the contracts of Oct, 31, 1912, Memoria de Hacienda, 1912-13. 



OF CENTRAL AMERICA. 247 

ment of all its outstanding obligations to the bankers 
and to the National Bank, including the sums still due 
on the 1911 treasury bills and the supplementary loans, 
and in the addition of $350,000 to the currency reserve. 
At the same time it was to subscribe $47,000, while the 
bankers subscribed $153,000, for an increase in the 
capital of the National Bank, which was to be raised 
from $100,000 to $300,000. The remainder of the 
money, amounting approximately to three quarters of 
a million dollars, went to the Republic for its current 
expenses. Since the bankers acquired fifty-one per 
cent of the stock of the National Bank as well as of the 
Railway by these contracts, it was arranged that they 
should name six, the Nicaraguan Minister of Finance 
two, and the United States Secretary of State one, of 
the directors of both corporations. 

Before these new treasury bills fell due, the outbreak 
of the European war put an end to all hope for the 
immediate financial rehabilitation of the Republic. The 
economic situation of the country at large was already 
very bad before this final disaster occurred. The ex- 
haustion and demorahzation which had resulted from two 
unusually destructive civil wars, combined with the 
reduction of military forces in the rural districts from 
motives of economy, had led to a great increase in high- 
way robbery and crime, which caused general unrest and 
discouraged internal commerce. Matters were made 
worse by the continual political agitation. The crops, 
moreover, had been severely damaged by droughts and 
by a plague of grasshoppers, and in many districts the 
agricultural population had been reduced to a pitiable 
state of want. The merchants in the cities had suffered 
great losses from the failure of the Government to pay 
for large amounts of supphes purchased or requisitioned 
by it, and from the inability of the treasury to meet the 
salaries of the pubhc employees, who made up a large 
part of the city population. When the outbreak of the 



248 THE FIVE REPUBLICS 

war cut off the European credits upon which both the 
coffee growerjs and the merchants had depended, foreign 
and domestic commerce came ahnost to a standstill. 
The income of the national treasury was greatly reduced, 
for the receipts from the customs duties declined from 
$1,730,603.22 in 1913 to $1,237,593.33 in 1914 and 
$789,716.76 in 1915, and the other revenues decreased 
at the same time to an alarming extent. It was mani- 
festly impossible for the government to meet even the 
most necessary of its current expenses, if it had to dis- 
charge its obligations to foreign creditors at the same 
time, and it would have faced absolute bankruptcy had 
not the bankers again come to its assistance. The pay- 
ment of interest on the treasury bills was suspended, by 
contracts made in October, 1914, and the bankers used 
their good offices to secure a similar suspension of charges 
on the Enghsh debt, in order that the Republic might 
use all of the reduced customs revenue for its own needs. 
These arrangements have since been renewed from time 
to time for short periods, always on condition that the 
Republic should so far as possible resume the service 
of the loans if it should receive the three million dollars 
due to it in accordance with the canal treaty with the 
United States. 

The conditions created by the war put a severe strain 
upon the new currency system. The replenishment of 
the reserve fund became well-nigh impossible just at the 
time when the disorganization of international credit, 
which forced exchange upon European centers to an 
unprecedented figure throughout the Western Hemi- 
sphere, caused an abnormal drain upon it. The National 
Bank, therefore, was forced to suspend the sale of the 
drafts by which the par value of its notes had been 
maintained. At the same time there was a strong 
popular demand for new issues of money to supply 
funds for the government and to finance the coffee 
growers, who were unable to secure the usual advances 



OF CENTRAL AMERICA 249 

from abroad for moving their crop. As a result of this, 
a contract was signed on December 2, 1914, by which 
a new issue of 1,500,000 Cordobas was provided for, — 
Cl,000,000 to be used for making loans to agricul- 
turahsts and exporters, and C500,000, which was to be 
guaranteed by the proceeds of a new capital tax collected 
by the National Bank, for the payment of salaries and 
other obligations of the government. At the same time, 
the Bank was authorized to pay its depositors with addi- 
tional notes, secured by mortgages and other securities. 
All of these issues were to be retired as rapidly as the 
loans were repaid and the profits of the capital tax were 
received. The interest upon the loans to planters and 
merchants, which was to be at the rate of twelve per 
cent, was divided between the government and the 
Bank, — an arrangement highly profitable to the latter, 
considering that the notes were exclusively obligations 
of the Republic. So long as these issues were still in 
circulation, the Bank was not to sell drafts against the 
reserve fund, and the government was to be relieved of 
its obhgation to maintain that fund at the amount re- 
quired by previous contracts. The new issues of paper 
and the suspension of the sale of exchange constituted 
of course a temporary abandonment of the gold standard. 
The premium on New York drafts rose to thirty per cent 
during the first months of 1915, but in May of that year 
it was greatly reduced by the operations of an English 
bank in Managua. Some months later, the National 
Bank itself resumed the sale of drafts with its own funds, 
thus raising its notes again to their par value. 

Early in 1916, all parties in the Republic turned their 
attention to the coming presidential election. In the 
campaign which preceded this, the various political groups 
enjoyed a very unusual amount of freedom in carrying 
on their propaganda, and each one founded clubs and 
pubhshed numerous newspapers to support its candidate. 
The chief factions which took part in the campaign were: 



250 THE FIVE REPUBLICS 

the government party, which had few friends outside of 
official circles; the old Conservatives, with their chief 
strength in Granada, who were in the main enthusiastic 
followers of Emiliano Chamorro; and the Liberals, who, 
though by no means entirely at harmony among them- 
selves, were nevertheless united in their determination 
to regain control of the government. There were also 
one or two lesser groups, which had hopes of coming 
into power as the result of a compromise between the 
more extreme parties. The Liberals, with the support 
of the great city of Leon, and with a strong following 
in each of the other important cities except Granada, 
were probably more numerous than all of their opponents 
together. It was clear from the beginning, however, 
that the outcome of the election would depend not so 
much upon the will of the majority as upon the attitude 
assumed by the United States. The administration, 
which had made Dr. Carlos Cuadra Pasos the official 
candidate, obviously intended to perpetuate its own 
regime, relying on the support of the American marines 
to prevent armed opposition to its plans. The Chamor- 
ristas, on their side, believed that the United States 
would insist that the Government accept their candidate, 
who had won general respect during his service as 
minister at Washington. The security of American 
interests in Nicaragua was in very large measure de- 
pendent upon the continuance in power of the Conserv- 
ative party, of which Chamorro was undoubtedly the 
most popular leader ; and the latter had strong additional 
claims to consideration because of his loyal support of 
the constituted authorities, after the disappointment 
which he had suffered in 1913, and despite the discontent 
of his own followers with the Diaz administration. 

The Liberals, on the other hand, beheved that any fair 
solution of the situation would restore them to power. 
They unquestionably constituted a majority of the people 
of the Republic, and they were on the whole more united 



OF CENTRAL AMERICA 251 

than their Conservative opponents. For several years 
they had been endeavoring to secure the withdrawal of 
the marines from Nicaragua, believing that they would 
easily obtain control of the government as soon as the 
existing administration should be deprived of foreign 
support; and they had been carrying on an extensive 
campaign in Central America and in pohtical circles in 
Washington with a view to arousing sentiment against 
the intervention of the United States in the internal 
affairs of Nicaragua. Their leaders desired first of all 
to secure the withdrawal of the American marines, but 
many were willing, if this proved unobtainable, to accept 
American supervision of the presidential election, which 
would have reduced somewhat the possibihty of the 
exercise of pressure and the employment of fraud by 
the government. Whatever chance the Liberals might 
once have had to secure the recognition of their right to 
participate on equal terms in the election, however, was 
forfeited when they nominated as their candidate for 
president Dr. JuHan Irias, Zelaya's most trusted min- 
ister, who had been closely associated with the dictator 
in all of the acts which had aroused the hostility of the 
United States between 1906 and 1909. Although Irias 
was one of the ablest and most popular leaders of the 
Liberal party, it was hardly possible that a man whose 
election would mean a restoration of the old regime 
should become president of Nicaragua with the consent 
and assistance of the United States. 

The United States could not well escape the respon- 
sibility for deciding which of the three candidates should 
become president for the ensuing term. A policy of 
non-intervention except to prevent disorder would have 
meant the election of Dr. Cuadra, against the wishes 
of the great majority of both parties. A supervised 
election, on the other hand, supposing that it could have 
been conducted with any fairness, which seemed unlikely, 
would probably have placed in office a president whose 



252 THE FIVE REPUBLICS 

avowed object was to expel the American bankers from 
the Republic and to terminate American influence in 
the government. It was almost inevitable under such 
circumstances that the Conservative party should receive 
the open support of the American minister. By the 
time of the election, it was evident that General Chamorro 
was to be the next president. Dr. Irias had been pre- 
vented from entering Nicaragua when he came home to 
conduct his campaign in August, and the Liberals had 
been warned that no candidate who had been associated 
with the Zelaya regime would be recognized by the 
United States if elected. Somewhat later Dr. Cuadra 
withdrew his candidacy. The election was held in 
October, and the new president. General Chamorro, was 
inaugurated in January, 1917. 

After the attempt to secure the ratification of the 
loan treaty had been finally abandoned, the hopes of 
the Nicaraguan Government for the eventual solution 
of its financial problems were centered upon a new agree- 
ment signed in February, 1913, which provided for the 
payment by the United States to Nicaragua of three 
milhon dollars in return for an exclusive right to con- 
struct a transisthmian canal through the San Juan River 
and the Great Lake and for the privilege of establishing 
a naval base in her territory on the Gulf of Fonseca. 
After Mr. Bryan assumed ofiice as Secretary of State, 
this treaty was modified by the addition of an article 
by which Nicaragua agreed not to declare war without 
the consent of the United States, or to enter into treaties 
with foreign governments affecting her independence 
or territorial integrity, or to contract public debts beyond 
her ability to pay, and by which she recognized the right 
of the United States to intervene in her affairs when 
necessary to preserve her independence or to protect 
life and property in her domain. This so-called pro- 
tectorate plan failed of ratification in the United States 
Senate, and a new treaty, without it, was signed on 



OF CENTRAL AMERICA 253 

August 5, 1914. Despite the strong opposition which 
this also encountered in the Senate, it was finally ratified 
with some amendments, and was proclaimed on June 
24, 1916. The principal provisions of the treaty as 
ratified were as follows: 

I. " The Government of Nicaragua grants in per- 
petuity to the Government of the United States, forever 
free from all taxation or other public charge, the exclu- 
sive proprietary rights necessary and convenient for the 
construction, operation, and maintenance of an inter- 
oceanic canal by way of the San Juan River and the 
Great Lake of Nicaragua, or by way of any route over 
Nicaraguan territory. . . . 

II. ". . . The Government of Nicaragua hereby 
leases for a term of ninety-nine years to the Govern- 
ment of the United States the islands in the Caribbean 
Sea known as Great Corn Island and Little Corn 
Island; and the Government of Nicaragua further grants 
to the Government of the United States for a like 
period of ninety -nine years the right to establish, operate 
and maintain a naval base at such place on the territory 
of Nicaragua bordering upon the Gulf of Fonseca as 
the Government of the United States may select. . . . 

III. "In consideration of the foregoing stipulations 
and for the purposes contemplated by this Convention 
and for the purpose of reducing the present indebtedness 
of Nicaragua, the Government of the United States shall 
. . .pay for the benefit of the Republic of Nicaragua 
the sum of three million dollars . . . to be applied by 
Nicaragua upon its indebtedness or other public purposes 
for the advancement of the welfare of Nicaragua in a 
manner to be determined by the two high contracting 
parties. ..." 

Even before this treaty had been made public, un- 
ofiicial reports reveahng its provisions had led Costa 
Rica and Salvador to protest vigorously to the United 
States and to Nicaragua against what each considered 



254 THE FIVE REPUBLICS 

to be a grave infringement of its own rights. Their 
opposition had led the United States Senate to add to 
the treaty a proviso declaring that nothing in the Con- 
vention was intended to affect any existing right of 
Costa Rica, Salvador, or Honduras. This, however, did 
little to conciliate those states, and the efforts of the 
State Department to secure their approval of the new 
condition of affairs created by the treaty by an offer to 
make similar agreements with them, to safeguard their 
rights and to indemnify them with pecuniary compensa- 
tions, proved unavailing. After the treaty had been 
proclaimed, Costa Rica and Salvador took their protests 
to the Central American Court of Justice, requesting 
that tribunal to enjoin Nicaragua from carrying out its 
provisions. The Court decided to take cognizance of 
the matter, despite Nicaragua's refusal to be a party to 
any action before it. ^ 

Costa Rica's case was a simple one, based upon treaty 
provisions. By the boundary treaty between her and 
Nicaragua, signed in 1858, she had been given perpetual 
rights of free navigation in the lower part of the San 
Juan River, and the Nicaraguan Government had agreed 
to consult her before it entered into any contract for the 
construction of an interoceanic canal. There had been 
some dispute about the terms of this treaty, which had 
led in 1888 to the submission of the questions at issue to 
the arbitration of President Cleveland. The latter had 
held the treaty valid, and had expressly declared in his 
award that : " The Republic of Nicaragua remains bound 
not to make any grants for canal purposes across her 

^ Costa Rica protested to the United States on April 17, 1913, and to 
Nicaragua on April 27, 1913, Salvador protested to the United States on 
October 21, 1913, and to Nicaragua on April 14, 1916. The notes exchanged 
in regard to the treaty are published in Costa Rica, Memoria de Belaciones 
Exteriores, 1913, 1914, etc., and in Salvador, Libro Rosado for the same 
jrears. The documents accompanying the cases presented before the Central 
American Court have been published in English by the legations of the 
two countries at Washington. 



OF CENTRAL AMERICA 255 

territory without first asking the opinion of the Repubhc 
of Costa Rica." Costa Rica asserted that the construc- 
tion of the proposed canal would interfere with her navi- 
gation of the San Juan River, thus infringing her rights 
under the convention of 1858 and also under those pro- 
visions of the Washington Conventions of 1907 which 
granted to each Central American Republic the free navi- 
gation of the waters of the others; that it would injuri- 
ously affect her own territory on the banks of the San 
Juan ; and finally that the Canal Treaty had been signed 
and ratified before she had even been informed of its 
provisions, and without her assent being asked at any 
stage of the proceedings. Nicaragua refused to answer 
the complaint of Costa Rica, and declared that she 
would neither recognize the competence of the Court to 
assume jurisdiction in the matter nor abide by its decision 
when rendered. She denied that the treaty was either a 
concession for the construction of a canal, or an agree- 
ment for the sale of the San Juan River, saying that 
it was only an option granting to the United States the 
privilege of building a canal, under an additional con- 
tract, at some future time. 

Salvador's case was based upon broader political 
grounds, and her protests were directed chiefly against 
the estabhshment of the naval base in the Gulf of 
Fonseca, in close proximity to one of her most important 
ports. " It must be patent to every one," her complaint 
stated, "that the establishment, by a powerful state, 
of a naval base in the immediate vicinity of the Republic 
of El Salvador would constitute a serious menace — not 
merely imaginary, but real and apparent — to the free- 
dom of life and the autonomy of that Republic. And 
that positive menace would exist, not solely by reason 
of the influence that the United States, as an essential 
to the adequate development of the ends determined 
upon for the efliciency and security of the proposed 
naval base, would naturally need to exercise and enjoy 



256 THE FIVE REPUBLICS 

at all times in connection with incidents of the highest 
importance in the national life of the small neighboring 
states, but would be also, and especially, vital because in 
the future, in any armed conflict that might arise between 
the United States and one or more military powers, the 
territories bounded by the Gulf of Fonseca would be 
converted, to an extent incalculable in view of the 
offensive power and range of modern armaments, into 
belligerent camps wherein would be decided the fate of 
the proposed naval establishment — a decision that would 
inevitably involve the sacrifice of the independence and 
sovereignty of the weaker Central American States, 
as has been the case with the smaller nations in the 
present European struggle under conditions more or less 
similar." 

Furthermore, Salvador asserted that the treaty 
violated her proprietary rights in the Gulf of Fonseca. 
As successors of the Central American Federation, she 
said, Salvador, Honduras, and IN^icaragua exercised a 
joint ownership over the Gulf, which clearly gave her 
the right to object to the use of its waters for military 
purposes by a foreign power. Her contention was some- 
what weakened by the fact that the three republics in 
question had divided all of the islands of the Gulf 
between them, and that each in practice exercised juris- 
diction over a portion of it; but it was nevertheless im- 
possible to show that any treaty to which Salvador had 
been a party had ever put an end to the community 
which the three adjacent republics had inherited from 
Spain and the Central American Federation. Salvador 
also asserted that the treaty was prejudicial to the 
general interests of Central America, which despite 
temporary political separation was nevertheless a definite 
political entity of which each of the states was still a 
part. The alienation of Central American territory by 
one country was a violation of the rights of the others. 
Such alienation was at the same time, by a rather far- 



OF CENTRAL AMERICA 257 

fetched interpretation, claimed to be a violation of the 
article in the Washington Peace Treaty of 1907 which 
declared any alteration in the constitutional order of 
one of the states a menace to the welfare of all. Finally, 
it was maintained that the treaty could not legally have 
been concluded under the Nicaraguan constitution, and 
was therefore void. 

The Court handed down its decision in the case of 
Costa Rica on September 30, 1916. It declared that 
Nicaragua had violated Costa Rica's rights by making 
the treaty, but it declined to declare the treaty void, 
as it had no jurisdiction over the United States. On 
March 2, 1917, it handed down a similar decision in 
the case of Salvador. Its action has been disregarded 
by Nicaragua, and by the United States. The decision 
has undoubtedly created an extremely embarrassing 
situation. There can be no doubt that the Court had 
jurisdiction over the question at issue, under the terms 
of the Washington conventions, or that the other Central 
American countries, and particularly Costa Rica, had 
strong cases against the convention, based not only upon 
international law and treaty provisions, but also upon 
the necessity for protecting their vital national interests. 
If the treaty is still put into effect, after what has hap- 
pened, both the Court of Justice and the Washington 
Conventions will have ceased to be of practical value, 
and our government will be committed to a policy which 
involves the entire disregard of what the Central Ameri- 
can republics consider to be their rights. It may well 
be doubted whether even the great military value of the 
proposed naval base, or the theoretical value of an option 
on another canal route, are worth the permanent ahena- 
tion of Central American pubhc opinion and the aban- 
donment of the considerations of justice and good will 
which have hitherto governed our relations with the five 
republics. 

The pohcy pursued by the United States Government 



258 THE FIVE REPUBLICS 

in Nicaragua since 1912 has caused bitter resentment 
throughout Central America. The Nicaraguan Liberals 
and most thinking people in other parts of the Isthmus 
feel that the intervention of American marines in the 
revolution of 1912 and the subsequent maintenance of 
the administration by armed force have reduced 
Nicaragua to the position of a subject country and 
have gravely jeopardized the independence of the other 
republics. The Diaz government has been regarded as 
a mere creature of the State Department, and it is 
denied that the agreements made by it are in any sense 
acts of the Nicaraguan nation. Both the contracts with 
the American bankers and the canal convention are 
regarded as evidences of an intention in the State De- 
partment to exploit the present situation for the benefit 
of American capitalists and for the promotion of an 
aggressive policy of political expansion. It is perhaps 
rather difficult for Americans, who realize how far any 
purpose of territorial expansion is from the minds of 
those who control our foreign pohcy, to comprehend 
the feeling of suspicion and fear which recent events 
have aroused among the more intelligent and patriotic 
classes in Central America. That feehng is nevertheless 
in large measure justified. No country can be said to 
enjoy independence when it is constantly in danger, 
as the events of the last five years have shown all the 
Central American republics to be, of arbitrary and 
sometimes undiscriminating intervention by an outside 
power in their political and financial affairs. Although 
the United States has been actuated in the policy which 
it has pursued solely by a desire to promote the peace 
and prosperity of the Central American countries, neither 
the necessity for the action which it has taken nor the 
purity of its motives has been fully appreciated in the 
Isthmus. The result has been a misunderstanding and 
a sentiment of hostility which threaten, unless steps can 
be taken to regain their confidence, to make the people 



OF CENTRAL AMERICA 259 

of the five republics regard their North American 
neighbor as their most dangerous enemy. 

It will be difficult to convince the Central Americans 
of the sincerity of our good will or the disinterestedness 
of our intentions so long as we continue to uphold a 
minority administration in Nicaragua by force of arms. 
The maintenance of the established authority has thus 
far been unavoidable because the only alternative was 
the abandonment of Nicaragua to a renewal of the civil 
wars which reduced her to so pitiable a condition before 
1912. Peace was the first and absolute necessity if the 
country were to be saved from utter ruin. But it is 
unthinkable that the United States, in the name of con- 
stitutional government, should permanently identify itself 
with any one faction or that it should continue indefinitely 
to use its power to exclude from all share in the admin- 
istration the party to which a majority of the people 
of the Republic profess allegiance. Ultimately, an at- 
tempt must be made, either to hold a fair election or 
to effect an agreement between the various parties by 
which a president accepted by all can be placed in office. 

Any adjustment of the political situation must neces- 
sarily involve measures to protect the interests of the 
American bankers, who have invested about two million 
dollars in their efforts to preserve Nicaragua from 
bankruptcy and to improve her economic condition. 
Brown Brothers and Company and J. and W. Seligman 
and Company entered upon their dealings with Nicaragua 
at the explicit request of the State Department, and it 
would be impossible to expose them to the partial or 
total loss of their investments by withdrawing the sup- 
port of the government. The first thought of a Liberal 
administration would be to undo so far as it could the 
situation created by the loan contracts. Actual confisca- 
tion of property would of course be impossible, but both 
the bankers and the holders of the English bonds, which 
are now secured by the American collection of the 



260 THE FIVE REPUBLICS 

customs duties, might suffer serious losses at the hands 
of an unfriendly president. For this reason, an agree- 
ment in regard to the future status of the bankers, or 
an adjustment of the debts due to them from the Re- 
pubhc, would be an essential part of any arrangement 
which aimed to terminate the American intervention. 

The motives and methods of the bankers, like those 
of the State Department, have been severely impugned 
by the Nicaraguan Liberals and by the leaders of public 
opinion in other parts of Central America. One con- 
stantly hears charges that they are co-operating with a 
corrupt and subservient administration to defraud the 
people, and that they have taken advantage of the needs 
of the government and the greed of the officials to secure 
control of all of the more valuable national property. 
Those who make these accusations point to the fact that 
the Republic has become heavily indebted to the New 
York firms, and that the National Railway, the National 
Bank, the customs houses, and the collection of the 
internal revenues have at the same time passed into their 
hands, while the government apparently has nothing to 
show in return. The more serious of these charges 
spring entirely from ignorance or from partisan political 
motives. The Liberals are ready to use any means and 
to make any statement likely to discredit the Conserv- 
ative administration or to arouse public sentiment in 
Nicaragua or in the United States against the policy 
which has enabled their rivals to remain in power; and 
the patriotic fervor of their efforts to free their country 
from alien domination receives at least a part of its force 
from the fact that they hope thereby to gain control 
of the government for themselves. Few of them, more- 
over, have taken the trouble to investigate the financial 
operations of the bankers in order to substantiate the 
accusations which they make. The writer was unable, 
during a stay of six months in Nicaragua, to find one 
prominent Liberal who had even read the loan contracts. 



OF CENTRAL AMERICA 261 

For this, and for the statement frequently put forth 
that the Government and the bankers have carried on 
their operations in secret and in an underhand manner, 
there is no excuse, for every one of the more important 
contracts has been pubhshed in the reports of the 
Minister of Finance, which are easily accessible to the 
public. It must be remembered, however, that there 
are very few persons in Nicaragua who are fitted by 
training or experience to form an intelligent opinion 
from the perusal of these documents. 

The bankers' investments in Nicaragua so far have 
been as follows: 

1913 Treasury Bills $1,000,000 

51^ of the stock in the National Railway . . . 1,000,000 
51^ of the stock in the National Bank 153,000 



Total (exclusive of accrued interest) .... $2,153,000 

Earlier loans were, as we have seen, repaid or refunded 
with the 1913 treasury bills. These bear interest at the 
rate of six per cent, which is certainly not excessive if 
we consider the desperate condition of the Republic's 
credit. The par value of the bankers' holdings in the 
capital stock of the railway is $1,683,000. Since the 
total net profits of the line were $244,706.62 Cordobas 
in 1913-14, and $251,320.56 in 1914-15,' it is evident 
that it will be a valuable property under foreign man- 
agement and protection, although the return thus far 
has not been great considering the dangers attending 
investments in such enterprises in countries where revo- 
lutions, with their consequent destruction of material 
and paralyzation of traffic, are of frequent occurrence. 
It should be remembered, moreover, that the Govern- 
ment still owns forty-nine per cent of the stock and thus 
receives nearly half of the profits, so that it is a direct 
beneficiary from the improvement in the property and 

^ Nicaragua, Memoria de Hacienda, 1915, p. 750. 



262 THE FIVE REPUBLICS 

the increase in the profits which resulted from the re- 
organization. The Republic shares similarly in any 
profits which may be made by the National Bank. 
This institution, founded primarily for the purposes of 
the currency reform, has apparently not made large 
profits up to the present time, because of its small capital, 
its not very efficient management, and the heavy en- 
penses involved in maintaining three separate branches 
besides the central office. It has received small sums for 
its services in connection with the currency reform, and 
it has in addition loaned considerable amounts to the 
government and to private individuals, charging both 
twelve per cent interest, which is rather less than the 
prevaihng rate in Nicaragua. The wisdom, and per- 
haps the propriety, of some of its operations have been 
open to criticism, but its services in connection with the 
currency reform and its extension of credit to the gov- 
ernment when the latter has been in difficulties have 
certainly justified its institution. 

The charge that the United States Government has 
been guided in its financial policy in Nicaragua by a 
deliberate intention to exploit the people of that country 
for the benefit of American capitalists is of course simply 
ridiculous. Equally so is the idea that two great financial 
institutions of the standing of Brown Brothers and 
Seligman and Company would compromise their reputa- 
tion and devote their time and energy in schemes for 
defrauding Nicaragua of a few thousands of dollars a 
year. The bankers have necessarily sought to protect 
their own interests, and in order to do so have imposed 
rather onerous conditions upon the Republic; but it 
must be remembered that they have been dealing with 
a practically bankrupt country, which is at the present 
time unable to meet any of its foreign obhgations, and 
that their investments are rendered doubly insecure by 
the bad economic situation and by the uncertainty of 
pohtical conditions. The sums involved and the possi- 



OF CENTRAL AMERICA 263 

bilities of illegitimate profits may well seem immense 
to citizens of a country whose total annual budget is 
only two or three million dollars; but no one who sees 
the matter in its true proportions can well believe that 
the bankers have been enriching themselves very rapidly 
at the expense of Nicaragua. 

On the other hand, it must be admitted that the loan 
contracts have contained much that is objectionable from 
the point of view of the patriotic Nicaraguan citizen. 
The situation which they have created cannot but be 
humiliating to a people which values its national inde- 
pendence. The collection of the public revenues by 
foreigners, and the sale of the most valuable national 
property, however necessary for the good of the country, 
has naturally been exceedingly distasteful to public 
opinion. Moreover there has been a suspicion, appar- 
ently too well founded, that some of the money received 
from the bankers has benefited certain high officials 
rather than the nation as a whole, and there is no doubt 
at all that large profits were made by members of the 
party in power as the result of the currency reform. 
The men sent from the United States to take charge 
of the various interests acquired by the bankers have 
not always shown tact or ability, and some of them, for 
this reason or from causes lying entirely beyond their 
control, have become very unpopular. The raising of 
rates by the railway, and the refusal to gi-ant free 
passes to all persons of social or political prominence, 
have caused much dissatisfaction; and the National Bank 
has been severely criticised for its failure to make loans 
to everyone who was in need of money. The currency 
reform was bitterly opposed at first because of the in- 
convenience which the conversion caused and the apparent 
shortage of money which resulted, and it was generally 
regarded as a failure when the bank-notes fell below par 
at the outbreak of the European war. It has since be- 
come more popular. The financial reforms as a whole. 



264 REPUBLICS OF CENTRAL AMERICA 

however beneficial in the long run, have involved expenses 
which the nation could ill afford. The expert commis- 
sion which worked out the currency reform, the mixed 
claims commission, the officials of the customs service, 
and other Americans who have been appointed to official 
or semi-official positions since 1912 have received remu- 
nerations which have seemed inordinately large as com- 
pared with the incomes of the native officials; and the 
publication of their salaries and their expense accounts 
has given rise to many charges of extravagance. 

It is easy to point out how insignificant these griev- 
ances are as compared with the benefits conferred by 
the adjustment of and the reduction of charges on the 
foreign debt, the immense improvement in the operation 
of the railway and in the customs service, and the estab- 
lishment of a currency system on a stable basis in place 
of the depreciated, fluctuating paper of former times. 
It is also easy to prove that the vast majority of the 
people have been inestimably better off through the 
maintenance of order, which has been entirely due to 
the military and financial support of the government by 
the United States, than they would have been if the 
bloody party strife and the wars with Central American 
neighbors which marked the last years of the Liberal 
regime had been allowed to continue. But this does 
not alter the fact that the situation which exists in 
Nicaragua today is inherently and fundamentally wrong, 
and that it cannot form a basis for a permanent settle- 
ment satisfactory either to that country or to the United 
States. Our government cannot continue to uphold by 
force a minority administration and to support that ad- 
ministration in a financial policy which is opposed by the 
great majority of the Nicaraguan people, if it wishes to 
eradicate the suspicion in Central America, and in fact 
throughout Latin America, that its ultimate intention is 
to deprive Nicaragua, and eventually her neighbors, of 
their position as independent nations. 



CHAPTER XII 
COMMERCE 

Principal Exports of the Isthmus: CoflFee, Bananas, and Precious Metals — 
Other Products — Imports — Condition of American Trade — Effects of the 
European War. 

The foreign commerce of Central America is based 
upon the exchange of coffee, bananas, precious metals, 
and a few other products of minor importance for man- 
ufactured articles from the United States and Europe. 
The most important export, from the Central American 
point of view, is coffee; for the banana farms, which 
belong to foreign corporations and are cultivated by 
foreign laborers, are situated in districts so far away from 
the centers of population that they play a small part 
in the economic life of the country, and the gold and 
silver mines are also with few exceptions the property 
of European and North American capitalists. The 
mining companies give employment to many natives at 
wages somewhat greater than those paid in agricultural 
enterprises, but otherwise they do little to add to the 
general prosperity of the community. The owners of 
the coffee plantations, the majority of whom are natives,, 
reside in Central America and spend their income there,, 
and all employ exclusively native labor. Except in 
Honduras, where it is cultivated only for local con- 
sumption, coffee is the chief export of the mountain 
region on the West Coast where the great majority of 
the inhabitants of the Isthmus live. 

Central American coffee is of an excellent quality, and 
brings a high price in the European markets, to which 
the greater part of it has always been sent. The product 
of Costa Rica is a favorite in England, while " Coban '* 
and other Guatemalan varieties are well known in 

265 



266 THE FIVE REPUBLICS 

Germany and on the continent. The product of the 
Isthmus has not been so popular in the United States, 
where it has been unable to compete with the lower- 
priced, but inferior, coffee of Brazil or with certain 
other superior grades which have secured a better foot- 
hold in our markets. Table V indicates the disposition 
of the crop of each country of the Isthmus in normal 
times, and to some extent the change which has been 
brought about in export conditions by the European war. 

TABLE I 

EXPORTS OF CENTRAL AMERICA, 1913. 

(Value in U. S. Gold.) 

Guatemala Salvador Honduras Nicaragua Costa Rica 

CoflFee 12,254,724 7,495,214 116,302 5,004,449 3,605,029 

Bananas 825,670 1,714,398 429,802 5,194,428 

Precious Metals 1,495,805 886,591 1,063,077 1,021,473 

Hides 455,476 95,870 159,820 326,599 132,883 

Timber 247,759 12,617 321,869 141,361 

Rubber 100,323 18,092 14,289 278,763 44,482 

Sugar 349,052 72,852 31,805 

Chicle 142,108 

Balsam of Peru 89,476 

Cocoanuts 219,968 

Indigo 52,984 

Cacao 39,828 105,034 

Live Cattle 251,361 288,009 » 

The ripe berry is prepared for the market at a clean- 
ing and drying plant called a beneficio. The larger 
growers, who produce the greater part of the total crop, 
ordinarily have their own beneficios on their plantations. 
Those who have not been able to install the rather ex- 
pensive machinery which these plants require either ship 
their coffee partly cleaned, in the shell, or else have it 
prepared for the market on the plantation of a neighbor 
or at establishments which exist for the purpose in such 
cities as Guatemala and Managua. The small land- 
holders, many of whom have a few trees from which they 

* Figures of Costa Rican government for imports from Nicaragua. 
Note. These figures are compiled from official statistics, or from the 
United States Daily Consular and Trade Reports, which in turn are based 
upon the official statistics of the Central American governments. They are 
inexact, because the statistics upon which they are based are rarely entirely 
trustworthy. 



OF CENTRAL AMERICA 267 

secure a money income to supplement their food crops, 
ordinarily sell their coffee in the berry to the owners of 
the beneficios. The exportation is frequently, perhaps 
usually, undertaken by the planter himself, who ships 
his crop directly to an importer in some European city 
or on consignment to an agent in Hamburg or London, 
to be sold in the open market. This seems to be the 
general though not the universal practice in Costa Rica, 
Salvador, and Nicaragua. In Guatemala, on the other 
hand, there are several German and North American 
houses which buy the coffee from the grower and export 
it on their own account. Certain companies in the 
United States, with agencies in Central America, have 
done a large business of this kind, especially since the 
beginning of the European war. 

The majority of the coffee plantations of the Isthmus 
belong to native Central Americans. This is true even 
in Guatemala and Nicaragua, where, as has been said 
in preceding chapters, nearly all of the largest and best 
equipped fincas are the property of Germans or of other 
aliens. ^ In Salvador and Costa Rica there are few 
foreign owners. Even in these countries, however, the 
tendency which has been so strong in Guatemala, for 
the more valuable plantations to pass gradually into the 
hands of investors from abroad, has been at work in 
recent years. Foreign influence, moreover, is by no 
means confined to the ownership of the plantations them- 
selves, for the native planters frequently have financial 
connections with European banking houses in the Central 
American capitals or in Hamburg or London which give 
the latter a large measure of control over the sale of 

' Special Agent Harris, in his Report on " Central America as an Export 

Field" (U. S. Dept. of Commerce, Special Agents' Series, No. 113), gives 

the following figures in regard to the ownership and production of the 
coffee plantations of Guatemala: 

Nationality No. of Plantations Product in quintals 

Guatemalan 1,657 525,356 

German 170 358,353 

North American 16 19,285 

Other 236 143,342 



268 THE FIVE REPUBLICS 

their coffee and even over their methods of production. 
A very large proportion of the plantations is heavily- 
mortgaged to these concerns, and even the annual crop 
is often hypothecated or sold to the banker several 
months before it is harvested, and is handled by him 
when ready for market. The terms of these arrange- 
ments are usually anything but favorable to the planter. 
In Guatemala, for example, the banker ordinarily not 
only receives interest on the sums advanced at the pre- 
vailing rate of ten or twelve per cent, but at the same 
time takes an option upon the entire crop, under which he 
can purchase it at twenty-five cents per bag less than 
the market price at the time of the harvest. This option 
alone is equivalent to the payment by the planter of 
about three per cent of his entire gross receipts, in addi- 
tion to the interest. Under these conditions, especially 
in view of the improvidence and inefficiency of many of 
the native landowners, it is not strange that the most 
desirable plantations are passing one by one into the 
hands of Germans and Englishmen, who are able either 
to finance themselves or to secure money for moving 
their crops upon better terms. 

TABLE II 

THE WORLD'S EXPORTS OF BANANAS, 1911. 

(From U. S. Daily Consular and Trade Reports, Dec. 26, 1912.) 

Central America — 

Costa Rica 9,309,586 bunches. 

Honduras 6,500,000 

Nicaragua 2,250,000 " 

Guatemala 1,755,704 

Total 19,815,290 bunches. 

Other Countries — 

Jamaica 16,497,385 bunches. 

Colombia 4,901,894 " 

Panama 4,261,500 

Canary Islands 2,648,378 

Cuba 2,500,000 

Mexico 750,000 

British Honduras 525,000 » 

Other Countries 1,037,516 

Total 33,121,673 bunches. 

Grand Total 52,936,963 bunches. 

Total imports into United States, 1911, 44,699,222 bunches. (Commerce 
and Navigation of the U. S., 1911.) 



OF CENTRAL AMERICA 273 

lishment of internal stability and the building of good 
roads to the metalliferous districts, however, mining 
should easily become a much more important industry 
than it is at present. 

In comparison with coffee, bananas, and the precious 
metals, the other exports of Central America are of 
little importance. The herds of cattle, which are one of 
the principal forms of wealth in Honduras and Nica- 
ragua, provide some horns and hides for shipment to 
foreign countries, but the quantity has hitherto been very 
small. The live animals are the chief articles of com- 
merce between Honduras and Nicaragua on the one 
hand and their more densely populated neighbors on the 
other, but they have never been exported to any extent 
to other countries. Mahogany, Spanish cedar, and other 
forest products, such as rubber and chicle, which is used 
in making chewing gum, are exported, chiefly by for- 
eigners, from the low country along the coasts. Sugar 
in various forms and cacao are grown in large quanti- 
ties, but almost entirely for local consumption. Besides 
these products, typical of any tropical country, there are 
others which have importance in certain locaHties as 
articles of foreign commerce. Thus, some millions of 
cocoanuts are shipped from the North Coast of Hon- 
duras, and indigo and balsam of Peru from Salvador. 
None of these minor exports have received very much 
attention, because the interest of the native community 
has been centered in the production of coffee and of the 
staple food crops, and foreign capital has been invested 
chiefly in mines, banana plantations, and railways. With 
the comparatively good transportation facilities that now 
exist, it would seem that there should be a great oppor- 
tunity for the cultivation of such products as cacao, 
vanilla, and rubber, or for the shipment to the United 
States, on the fast banana steamers, of some of the 
countless delicious tropical fruits which have hitherto 
been almost imknown in our markets. Countries of 



274 THE FIVE REPUBLICS 

such rich and varied agricultural possibilities, with such 
easy access to the Gulf ports of the United States, must 
eventually acquire an importance far greater than that 
which they now have in supplying our markets with 
many kinds of food which we cannot ourselves produce, 

TABLE III 
SHARE OF THE UNITED STATES, GREAT BRITAIN, AND GER- 
MANY IN THE COMMERCE OF CENTRAL AMERICA. 

EXPORTS. 

United States Great Britain Germany Total 

Guatemala, 1913 3,923,354 1,857,105 7,653,557 14,449,926 

1915 6,881,410 1,322,271 50,237 11,566,586 

Salvador, 1913 2,676,637 668,823 1,611,085 9,411,112 

1915 3,096,277 341,920 9,945 8,812,387 

Honduras, 1913 2,974,000 18,000 164,000 3,421,000 

1915 2,987,000 1,000 690 3,858,000 

Nicaragua, 1913 2,722,385 998,564 1,887,698 7,712,047 

1915 3,079,810 438,500 4,567,201 

Costa Rica, 1913 5,204,429 4,319,085 504,506 10,324,149 

1915 4,864,803 4,438,233 13,225 9,971,582 

Total for Central 

America, 1913 17,500,805 7,861,577 11,820,866 45,318,234 

1915 20,909,300 6,541,924 74,097 38,775,756 

(Compiled from official reports of the Central American governments. 
The values are given as in American gold, calculated at the prevailing rate 
of exchange for the year in question.) 

Even before the beginning of the European war, the 
United States bought the greater part of Central 
America's exports. Nearly all of the bananas went to 
American ports, as did by far the greater part of the 
gold and silver from the mines. With the coffee, the 
situation was different, but the partial closing of the 
European markets forced the planters to seek a market 
for this in the United States. This was especially true 
in Guatemala, where American buyers were almost the 
only ones in the field during 1915 and 1916. In the 
countries which had been less dependent on the German 
market, the change was not so marked, but all of them 
nevertheless shipped more coffee to the United States 
in those years than ever before. Costa Rica, however, 
retained her privileged position in the London market. 



OF CENTRAL AMERICA 275 

at least during 1915, and Salvador found valuable new 
customers in the Scandinavian countries and Holland. 
The necessity for finding new purchasers has naturally 
involved a considerable loss for the Central American 
planters. Their coffee has on the whole met with a 
favorable reception in the United States, but the prices 
which they have received have not been so high as those 
to which they were accustomed in the markets in which 
they had long established connections, and they have en- 
countered no httle difficulty in making shipments because 
of the withdrawal of many of the steamers which for- 
merly called at the ports of the Isthmus. 

TABLE IV 
IMPORTS OF COFFEE INTO THE UNITED STATES, 1913 and 1915. 
(From Commerce and Navigation of the United States, 1915, p. 75.) 

1913 1915 

Guatemala 18,544,228 lbs. 44,605,039 lbs. 

Salvador 8,756,267 " 15,823,350 " 

Nicaragua 2,915,239 " 6,430,600 " 

Honduras 239,114 " 665,912 " 

Costa Rica 1,474,397 " 6,770,964 " 

TABLE V 

COFFEE EXPORTS OF CENTRAL AMERICA, 1913 and 1915. 

(Figures in quintals of 100 lbs. Spanish or 46 kg. From Central American 

government publications.) 

Guatemala Salvador Nicaragua Costa Rica 

1913 1915 1913 1915 1913 1915 1913 1915 

US 211,886 386,080 107,796 142,337 36,753 62,439 16,032 38,969 

England ....106,666 * 34,151 29,127 32,854 40,816 231,382 204,711 

Germany ...432,329 * 121,201 994 75,634 25,451 1,304 

Austria-H. . 42,054 * 35,574 381 

France * J59,559 90,502 103,012 57,379 

Italy 95,389 76,147 30,095 

Holland 92,763 

Scandinavian 
countries 218,619 

Total 



"exports ...875,337 775,622 625,942 663,216 243,324 198,533 283,023 265,355 
* Figures not available. 

The imports of Central America are those of all tropi- 
cal countries which have no manufacturing industries 
of their own. Machinery and tools for agricultural pur- 
poses; textiles; flour, lard, and other food products 



276 THE FIVE REPUBLICS 

which are produced in insufficient quantities in the 
Isthmus; and in general, manufactured articles of all 
kinds, must be purchased abroad. The greater part of 
these are for the use of the upper classes, but even the 
ordinary laborers, whose standard of living in many- 
places is otherwise little better than it was in the days 
when the country had no foreign commerce, use some 
foreign goods, such as cheap textiles and machetes. 

In the import as well as the export trade, the United 
States easily occupies the leading place, supplying the 
greater part of the foodstuffs, hardware, and machinery, 
and a very considerable part of the textiles. Our share 
in the total, even before the war, was well over fifty 
per cent, with Great Britain and Germany respectively 
second and third. Tables VI, VII, and VIII will give 
an approximate idea of the nature and origin of the 
imports of the Isthmus in normal times. The predom- 
inance of the United States was due primarily to 
proximity and superior steamer connections. The Carib- 
bean ports of the Isthmus, which are less than fifteen 
hundred miles from our Gulf ports, were connected with 
those ports by regular lines of swift steamers, whereas 
they had no adequate means of communication with 
Europe. The Pacific ports, on the other hand, although 
they were visited regularly by the small steamers of the 
German Cosmos Line, relied chiefly upon the service 
of the Pacific Mail between San Francisco and Panama. 

This gave American trade an advantage which would 
have been even greater than it was if transatlantic manu- 
facturers had not been favored by several factors which 
to some extent offset their geographical handicap. 
Freight rates to Europe, however, were not propor- 
tionately greater than rates to the United States, even 
in cases where the goods must be transshipped at a 
North American port. Furthermore, European mer- 
chants controlled the greater part of the import and 
wholesale trade in each of the five republics, and natu- 



OF CENTRAL AMERICA 



277 



TABLE VI 

SHARE OF THE UNITED STATES, GREAT BRITAIN, AND GER- 
MANY IN THE COMMERCE OF CENTRAL AMERICA. 

IMPORTS. 

(Compiled from Central American government publications; values in 

American gold.) 

United States Great Britain Germany Total 

Guatemala, 1913 5,053,060 1,650,387 2,043,329 10,062,327 

1915 3,751,761 577,206 146,053 5,072,476 

Salvador, 1913 2,491,145 1,603,846 713,855 6,173,545 

1915 2,478,322 1,054,838 41,136 4,182,922 

Nicaragua, 1913 3,244,008 1,150,611 619,212 5,770,006 

1915 2,592,799 302,294 36,960 3,159,219 

Honduras, 1913-14 5,262,000 460,000 522,000 6,625,000 

1914-15 5,177,000 303,000 96,000 5,875,000 

Costa Rica, 1913 4,468,946 1,289,181 1,341,333 8,867,280 

1915 3,031,997 548,810 42,979 4,478,782 

Total for Central 

America, 1913 20,519,159 6,154,025 5,239,729 37,498,158 

1915 17,031,879 2,786,148 363,128 22,768,399 



TABLE VII 
PRINCIPAL IMPORTS OF GUATEMALA, 1913 and 1915. 

(From U. S. Commerce Reports and Guatemalan official statistics; values in 

American gold.) 

1913. 1915. 

Cotton goods, total 1,734,832 758,570 

United States 503,920 

Great Britain 778,278 

Germany 337,181 

Linen, hemp, and jute manufactures (in large part 

coffee sacks). Total 222,320 252,481 

United States 20,788 

Great Britain 80,954 

Germany 111,141 

Woolen manufactures, total 253,107 52,308 

United States 30,938 

Great Britain 64,635 

Germany 111,866 

Silk manufactures, total 263,448 68,525 

(Mostly from Japan, China, and France.) 

Manufactures of iron and steel, total 685,548 121,198 

United States 384,094 

Great Britain 97,434 

Germany 181,538 

Glass, crockery, earthenware, etc., total 106,825 27,859 

United States 24,783 

Germanv 58,944 

Leather goods, total 156,688 94,661 

United States 110,318 

Germany 30,244 

Foodstuffs, total 566,856 538,236 

United States 260,854 

Great Britain 54,859 

Germany 86,923 



278 THE FIVE REPUBLICS 

TABLE YII— Continued 

1913. 1915. 

Stationery, paper, etc., total 179,798 147,243 

United States 87,420 

Germany 60,491 

Drugs and medicines, total 268,523 108,666 

United States 99,359 

Germany 62,375 

Wheat flour, from United States 394,931 506,510 

Agricultural and industrial machinery, total 350,366 127,433 

United States 175,683 

Great Britain 86,456 

Germany 78,711 

Lumber, from United States 179,880 78,667 

Railway material, total 426,826 121,843 

United States 424,235 

Petroleum, from United States 184,936 110,925 

Wines, liquors, etc., total 347,752 125,583 

United States 73,752 

Germany 73,415 

Other articles, total 1,636,678 732,449 

United States 1,079,007 

Germany 406,214 

Great Britain 50,298 



TABLE VIII 

PRINCIPAL IMPORTS OF COSTA RICA. 

(From Costa Rican official statistics, quoted in U. S. Commerce Reports, 
Dec. 9, 1916. Values in American gold.) 

1913. 1915. 

Live cattle, from Nicaragua 323,067 95,964 

Cotton goods, total 828,948 466,699 

United States 243,802 266,333 

Great Britain 355,042 129,848 

Germany 124,699 4,491 

Coal, total 261,975 106,953 

United States 258,329 92,039 

Drugs, total 150,142 115,903 

United States 76,173 85,194 

Germany 29,690 4,065 

Electrical material, total 150,339 95,176 

United States 121,416 86,773 

Flour, total 258,407 224,480 

United States 257,457 209,662 

Lard, total 200,362 144,181 

United States 194,968 142,270 

Railway material, total 296,772 62,387 

United States 272,242 59,725 

Rice, total 143,391 108,649 

United States 31,621 93,283 

Germany 82,088 

Wheat, from United States 219,487 323,567 

CoflFee sacks, total 88,958 98,531 

United States 11,161 13,220 

Great Britain 69,424 83,919 



OF CENTRAL AMERICA 279 

rally bought articles from export houses in their own 
country, whenever they could, not only for sentimental 
reasons, but because they received better terms and 
longer credits. Even at the present time, when the war 
has caused a great reduction in the exports of all of the 
belligerent countries, the people of the Isthmus still 
continue to buy certain classes of goods from French 
or English manufacturers which might just as well be 
imported from the United States if American manu- 
facturers made an effort to secure the trade. 

That they have not done so seems to be due chiefly 
to indifference. The reasons why American exporters 
fail to make a better showing in Latin American markets 
have been discussed so often and so fully in the last 
three years that there is little object in repeating them 
here. It is sufficient to say that the same story of care- 
lessness in filhng orders and in packing goods, of failure 
to send well-equipped salesmen, and of refusal to comply 
with the custom of the country in such matters as credits 
and accommodations, are heard in Central America as 
elsewhere. Since the European war has forced the 
importers of the Isthmus to depend more than ever be- 
fore upon American manufacturers for their supplies, 
one hears many complaints of inconsiderate or discour- 
teous treatment, and of general inefficiency in handling 
trade. 

One of the chief obstacles to the increase of American 
trade in Central America has been the lack of banking 
facilities. Most of the banks which exist in the larger 
cities of the Isthmus at the present time are purely local 
institutions, and their operations are rarely such as to 
make them a strong force for good in the economic life 
of the community. They speculate in the rate of ex- 
change, issue more or less depreciated paper money, 
engage in financial transactions with the government 
which consume a large part of their available funds, 
and make loans to planters and merchants at rates of 



280 THE FIVE REPUBLICS 

interest which vary from ten per cent, with first-class 
security, to thirty or forty per cent in cases where the 
element of speculation is greater. These conditions, 
which are perhaps inevitable in a country where capital 
is so scarce and where the instability of political affairs 
makes the element of risk in all credit transactions so 
great, seriously detract from their usefulness. Unfor- 
tunately, moreover, there are some institutions which are 
not managed in accordance with the principles either of 
sound banking or of ordinary honesty, and these are 
necessarily a source of weakness to the whole financial 
community. Within the last five years, two of the 
largest banks in Central America have failed, under cir- 
cumstances which aroused very grave suspicions of mis- 
management and defalcation. The banks cannot afford 
adequate facilities for financing the export and the im- 
port trade, for they have neither the available funds nor 
the connections abroad which are necessary for this pur- 
pose. Moreover, they can obtain such high profits in 
other forms of operations that there is little inducement 
for them to engage in ordinary commercial transactions. 
Many of them are engaged in the coffee export business 
or in other forms of trade themselves and are conse- 
quently little inclined to aid other merchants who may wish 
to compete with them. The establishment of branches 
of American banks, dedicated to a legitimate banking 
business, and especially to the financing of Ameri- 
can trade, would perhaps do more to stimulate com- 
merce with the United States than any other one 
influence. 

The question of credits has been another serious 
obstacle to the development of our trade. The average 
Central American merchant must have from three to 
six months to make payment for goods which he imports, 
because he in turn must grant a considerable time to the 
small retail dealers whom he supplies. American manu- 
facturers are as a rule unwilling to grant credits for so 



OF CENTRAL AMERICA 281 

long a period, and they have sometimes exposed them- 
selves to heavy loss when they have done so because of 
the difficulty of ascertaining which of the local importers 
were deserving of confidence. This difficulty also could 
to a great extent be obviated if reliable American banks 
could be established in the five republics. 

That our commerce holds first place in Central Amer- 
ica despite these drawbacks is due partly to the fact 
that there are certain articles, such as flour, railway ma- 
terial, and petroleum, which the people of the Isthmus 
must almost inevitably purchase in our markets, and 
partly to the activity of a few great corporations which 
have stores or permanent agencies in Central America, 
and handle a very large amount of imports from the 
United States. The United Fruit Company and other 
fruit companies in Honduras and Nicaragua, as well as 
most of the mining companies, maintain commissaries 
where American goods are sold in great quantities. 
Grace and Company, in co-operation with the American 
International Corporation, does a considerable business 
in merchandise on the West Coast, and has offices in 
most of the important cities of the Isthmus. Several 
well-known American manufacturers also are more or 
less adequately represented by permanent agents in the 
important commercial centers. 

Although our share in the total imports and exports 
of the Isthmus has been greater than ever before, since 
the beginning of the European war, the total of our 
trade has not been so large as might have been expected, 
because of the partial paralyzation of the commerce of 
the five repubhcs. At the outbreak of hostihties the 
foreign credits upon which the normal business of the 
Central American community had depended were en- 
tirely cut off, and exchange on European centers rose 
to a prohibitive figure, especially in the countries which 
were not on a gold basis. Merchants were thus unable 
to obtain goods or even to pay their debts. At the 



282 THE FIVE REPUBLICS 

same time, the purchasing power of their customers was 
seriously decreased, because the rise in the rate of ex- 
change made prices inordinately high in the local cur- 
rency, and because the planters, unable to secure ad- 
vances from abroad to move their crops, were forced to 
cut down their expenditures and in some cases to lay 
off their workmen. Most of the governments, also, were 
in severe financial difficulties, for their revenues, which 
consisted chiefly of the import duties, had declined, and 
their expenditures, of which the money for the service 
of the foreign debt constituted an important part, had 
increased with the advance in the cost of foreign drafts. 
Some of them were thus unable to pay their employees, 
and the poverty of the latter intensified the general 
financial depression. For a time, the sale of foreign 
goods almost ceased. When it was found, however, 
that the products of the Isthmus could still be sold 
abroad, even if at somewhat lower prices, confidence 
began to return and commerce recovered to some degree, 
but imports are still far below normal, and seem likely 
to remain so for some time. 

After the close of the war, it seems probable that the 
position lost by English and German exporters since 
1914 will be regained by them, unless their American 
competitors make a more successful effort than they 
have yet made to secure a permanent foothold in the 
market. The European houses which control the import 
business of the Isthmus will probably turn back to their 
former correspondents at the first opportunity, for their 
experience with American firms in the last three years 
has not been such as to encourage them to continue it 
after they are able to resume their old connections. 
Many of the difficulties which merchants in Central 
America say they have encountered in dealing with 
American exporters have undoubtedly been due to war 
conditions in the United States and to an ignorance on 
both sides of the other's methods of doing business, but 



OF CENTRAL AMERICA 283 

many others can only have resulted from carelessness 
and indifference to new trade opportunities. 

Nevertheless, there is every prospect that the share 
of the United States in the commerce of Central America 
will continue to increase in the future as it has in the 
past. Proximity and the excellent steamer connections 
created by the banana trade give our manufacturers an 
advantage against which European importers will find 
it increasingly hard to compete. The North American 
element in the Isthmus as a whole is increasing more 
rapidly than any other foreign element, especially in the 
banana towns on the East Coast, and North American 
investments are probably already greater than those of 
any other country. The richer classes among the Cen- 
tral Americans themselves, moreover, travel more and 
more in the United States rather than in Europe, and 
thus acquire a taste for articles of North American manu- 
facture, where they formerly demanded French or Eng- 
lish products. A great increase in our trade with the 
five republics waits only upon the establishment of 
proper banking facilities and upon the awakening of 
American exporters to a realization of their opportuni- 
ties. 



CHAPTER XIII 
CENTRAL AMERICAN PUBLIC FINANCE 

Sources of Revenue — Defects of the Fiscal Systems — Floating Debts — 
Brief History of the Bonded Debt in Each Republic — Depreciation of the 
Currency Systems — The Monetary Situation in Each Country — Need for 
Financial Assistance from the United States. 

Few factors have done more to retard the economic 
progress of the Central American repubhcs than the 
defects of their fiscal systems. The inability of the gov- 
ernments to meet the current expenses of efficient ad- 
ministration or to discharge their obligations to for- 
eigners, and the demoralization of the monetary systems 
which has resulted from attempts to make the deprecia- 
tion of the currency a source of revenue, have been a 
serious drawback to the investment of capital and the 
development of commerce in the Isthmus, and have in- 
volved some of the five countries in rather serious diplo- 
matic complications. This financial weakness has been 
due partly to the nature of the governments' incomes, 
partly to defects in administration, arising from igno- 
rance or dishonesty, and partly to general economic and 
political conditions. 

Each of the five republics obtains its revenues princi- 
pally from customs dirties, on exports and imports, and 
from the rum monopoly. Other sources of income, of 
which the most important are tobacco and powder 
monopolies and stamp taxes, amount to very little as 
compared with these two great items. Direct property 
taxes, the introduction of which has at times been at- 
tempted in Guatemala, Nicaragua, and Costa Rica, have 
met with very little success, and have been very un- 
popular. 

This fiscal system has many bad features. The duties 
upon imports, upon which the chief reliance is placed, 

284 



REPUBLICS OF CENTRAL AMERICA 285 

are so high that they seem in many cases to discourage 
commerce. This is especially true in regard to the cheap 
textiles and other articles used by the working classes, 
for the imposition of the duty according to the gross 
weight of the package, and the failure to make adequate 
distinction between different qualities of the same cate- 
gory of articles, raises the prices of some goods to a 
point where consumption is materially lessened. There 
are still stronger objections to the second great source 
of revenue, the manufacture and sale of aguardientej 
or rum, for as in other countries where similar monopolies 
have existed the temptation to stimulate the consump- 
tion of the liquor has in some cases proved stronger than 
consideration for the welfare of the community. In 
view of the relation between drink and vice and crime, 
which is nowhere more directly evident than among the 
working classes of the Isthmus, it is hard to understand 
how the pubHc authorities can not only permit but en- 
courage the unrestricted sale of what is little more than 
a low grade of alcohol. Some of the governments, in- 
deed, have endeavored by raising the price of the 
aguardiente to check its consumption, and have done so 
without materially decreasing their own income, but 
with the majority the object has seemed to be to sell a 
large amount at a low price rather than the opposite. 
The following table shows the revenues of each of the 
five repubhcs in 1913, the last year before the general 
financing disorganization caused by the European war: 

Revenues in 1913. (Approximate equivalent in American gold.) 
Source of revenue Guatemala Honduras Salvador Nicaragua Costa Rica 

Import duties 1,930,000 1,130,000 2,900,000 1,680,000* 2,500,000 

Export duties 1,275,000 88,000 600,000 112,000 

Liquor and other 

monopolies 450,000 775,000 1,200,000 1,368,000 1,150,000 

State owned railways, 

telegraphs, postal 

service, etc. (Gross 

income) 200,000 140,000 285,000 500,000 

Miscellaneous 325,000 377,000 615,000 317,000 208,000 

Total revenues 4,180,000 2,500,000 5,600,000 3^55,000 4,470,000 

* Includes export duties. 



286 THE FIVE REPUBLICS 

The way in which the Central American governments 
spend their income has already been described. The 
heaviest outlays are those for military purposes and for 
the service of the foreign debt. The following table 
shows roughly the division of the expenditures between 
the different departments of the administration: 

Expenditures in 1913. (Approximate equivalent in U. S. gola.) 

Department Guatemala Honduras Nicaragua Salvador Costa Rica 

Gohernacidn 220,000 320,000 208,000 860,000 380,000 

Public works 130,000 287,000 902,000 600,000 695,000 

Public instruction . . . 180,000 152,000 159,000 354,000 635,000 

War and marine 520,000 720,000 410,000 1,600,000 627,000 

Finance and public 

credit 475,000 185,000 385,000 2,150,000 1,320,000 

Charities * * 9,600 500,000 80,000 

Judiciary * 70,000 127,000 280,000 325,000 

Miscellaneous 695,000 26,000 2,800,000 126,000 211,000 

Total expenditures .. 2,320,000 1,750,000 4,809,000 6,470,000 4,273,000 
* Not specified. 

Note. The miscellaneous expenditures include items of nearly $500,000 
for " exchange," i. e. lor buying drafts on foreign places, in Guatemala, and 
of $1,680,000 for paying claims arising from recent revolutions in Nicaragua. 

The revenues are decreased, and the expenditures are 
increased, in some countries to an alarming degree, by 
inefficiency and corruption in their administration. The 
control of the public funds is almost entirely in the 
hands of the President and his subordinates, for the 
voting of taxes and of the budget by Congress is a very 
perfunctory matter even in those countries which have 
most nearly attained constitutional government in other 
respects. The income is derived from sources which 
remain much the same from year to year, and its dispo- 
sition is subject to little control by the Congress, because 
the annual financial legislation does not always appro- 
priate specific sums for specific purposes, but simply 
divides the estimated expenditure between the various 
departments. The administration, moreover, does not 
seem to regard itself as bound to keep within the general 
limits laid down if it can obtain funds for additional 



OF CENTRAL AMERICA 287 

outlays. The Congress, which is rarely in a position to 
oppose itself to the wishes of the executive in this or in 
other matters, usually ratifies excess expenditures or 
proposed changes in the budget with little question. 

In some of the countries, there is undoubtedly a large 
amount of corruption in the management of financial 
affairs. The traditions of the public service encourage 
rather lax conduct on the part of the officials, for custom 
and public opinion tolerate many practices which are 
now considered improper in countries which have had a 
longer experience in self-government, and those who are 
unscrupulous are aided in defrauding the government by 
the inadequate provision which is made for the super- 
vision of accounts. The commonest forms of graft are 
those which imply a rather loose standard of official 
morality rather than actual theft or dishonesty, but it 
cannot be denied that there are many officials, some of 
whom occupy the highest positions in their respective 
countries, who have enriched themselves during their 
tenure of office by means which nothing could excuse. 
Few such men, fortunately, occupy positions of power 
in the five republics at the present time. 

The chief fault of Central American public finance 
is the indifference shown in regard to the balancing of 
revenues and expenditures. The governments frequently 
pay salaries and other obligations with receipts rather 
than with money. This practice gives rise to many 
abuses, for often the receipts can be cashed only by 
persons having influence with the authorities of the 
treasury department, and thus become a source of graft. 
Certain governments, indeed, make it a practice to buy 
their own promises to pay at a discount, after depre- 
ciating them by refusing to redeem them at their face 
value. The floating debt, which ordinarily bears a very 
high rate of interest, is always an indefinite but steadily 
increasing quantity, comprising a great variety of obli- 
gations. It includes claims for salaries and for supplies 



288 THE FIVE REPUBLICS 

furnished to the government, for damage to property 
during revolutions, for violated concessions and con- 
tracts, and other demands of every degree of validity. 
Some of these are paid off from time to time as the 
condition of the treasury permits, but no provision is 
made for the service or amortization of the internal debt 
as a whole. ^ 

Each of the five republics has also a bonded debt, 
held for the most part in England. In most cases this 
dates back to the loan of £163,000 contracted in London 
by the officials of the first Central American Federation. 
Costa Hica and Salvador paid off their share of this 
after they became independent, but the other states, 
after defaulting for several years, eventually made ar- 
rangements for refunding the bonds with new loans. 
At the same time, further issues were made, chiefly for 
the construction of railways, during the period of pros- 
perity and inflation which accompanied the first develop- 
ment of the coffee plantations in the seventies and 
eighties. These were often accompanied by fraud, in 
which both the officials of the Central American govern- 
ments and the companies which floated the bonds par- 
ticipated, and which in some cases reached immense pro- 
portions. The service of the foreign debts became very 
difficult when the coffee prices fell, and when the decline 
in the price of silver, upon which the monetary systems 
of the Isthmus were based, greatly increased the amount 
of the debt in terms of the national currency without pro- 
portionately increasing the national revenues. During 
the decade 1890-1900, nearly all of the republics found 

* The internal debt of each of the republics, according to statistics compiled 
from their Treasury Reports and from the 1915 Report of the Council of the 
Corporation of Foreign Bondholders, was as follows on December 31, 1914. 
(Figures in American gold.) 

Guatemala 3,880,986 

Salvador 4,563,676 

Nicaragua 6,676,662 

Honduras (July 31, 1914.) 1,844,585 

Costa Rica 2,692,215 



OF CENTRAL AMERICA 289 

it impossible to maintain regular payments of interest. 
TsTew arrangements were therefore made with the cred- 
itors, who were forced to accept successive reductions 
of their claims, amounting in some cases to a large pro- 
portion of the total, in order to obtain any payment at 
all. These readjustments, with the partial repudiation 
which they involved, naturally injured severely the 
credit of the five countries. 

Guatemala has until very recently been involved in 
almost continuous difficulties with her creditors. Her 
share of the debt of the Central American Federation 
remained in default until 1856, when it was refunded 
with the accrued interest into a new five per cent loan 
of £100,000. In 1869 another loan of £500,000, issued 
at 70y2 and bearing interest at six per cent, was issued 
through a London banking house. Both loans went 
into default in 1876. They were refunded in 1888 by a 
bond issue of £922,700, bearing four per cent interest, 
and another issue was made at the same time to con- 
solidate the internal debt. The Repubhc again failed 
to meet its obligations to its creditors in 1894, and the 
latter were forced to accept a further reduction of their 
claims. By an arrangement made in 1895, both the 
external and internal bonds were refunded by a new 
issue of £1,600,000, at four per cent, secured by a special 
tax of $1.50 gold on each bag of coffee exported. These 
bonds now constitute the principal foreign debt of the 
Republic. The government soon violated the terms of 
the agreement under which they were issued, for the 
the coffee export tax was reduced in 1898 and 1899, 
and its proceeds were used for other purposes than the 
service of the loan. Payments of interest were sus- 
pended from 1898 to 1913. After several fruitless at- 
tempts to reach an agreement, the bondholders finally 
secured the resimiption of payments through the ener- 
getic diplomatic intervention of the British government, 
and the interest has been met regularly since 1913. The 



290 THE FIVE REPUBLICS 

principal, on December 31, 1915, amounted to £2,357,- 
063.' 

Salvador had paid off her share of the federal debt 
in 1860, by a compromise with the holders of the bonds. 
In 1899, a loan of £300,000 at six per cent and in 1892 
another of .£500,000 at six per cent were obtained from 
bankers in London for the purpose of extending the 
railway line from Acajutla to Santa Ana and San 
Salvador. These were secured by mortgages on the rail- 
way. In 1894 the service of the loans was assumed by 
the Central American Public Works Company, which 
took over the railway for eighty years in return for a 
promise of an annual subsidy from the government and 
a guarantee of a minimum annual profit. In 1899 this 
company entered into another contract with the Republic, 
by which it agreed to retire on its own account all of the 
1889 and 1892 bonds, converting them into five per cent 
mortgage debentures of the Salvador Railway Company, 
which had been formed to take over the concessions held 
by the Public Works Company. The Railway Company 
was to receive a fixed annual subsidy of £24,000 for 
eighteen years. In this way the bonds ceased to be 
obligations of the Republic. The only foreign bonded 
debt of Salvador at the present time is the issue of six 
per cent sterling bonds secured through two London 
banks in 1908. On January 1, 1916, £756,900 out of 
the original £1,000,000 were still outstanding. The 
service of these was suspended after the outbreak of the 
European war, but an arrangement was made with the 
bondholders by which the coupons from August, 1915, 
to August, 1919, were to be funded into new bonds 
bearing seven per cent interest. 

Costa Rica, which had paid off her share of the 
Central American debt in full immediately after the 

^ These and other details in regard to the bonded debts of the Central 
American Republics are for the most part based on information in the 1915 
Report of the Council of the Corporation of Foreign Bondholders in London. 



OF CENTRAL AMERICA 291 

dissolution of the Federation, contracted two loans in 
London, — one of £1,000,000 at six per cent in 1871, 
and the other of £2,400,000 at seven per cent in 1872, — 
during the first years of General Guardia's administra- 
tion. From the two, it is said that the RepubHc received 
a total sum of £1,158,611, 18 s, 5 d,' the rest being kept 
by the speculators who arranged the transaction. The 
service of the debt was suspended in 1874. In 1885 a 
new arrangement was made through Mr. Minor C. Keith, 
by which the old bonds were refunded at one half their 
face value by a new issue of £2,000,000 at five per 
cent. The interest was to be paid by Mr. Keith until 
1888, in return for concessions in regard to the railroad 
which he was building, and after that date by the gov- 
ernment. The service of the debt was suspended from 
1895 to 1897, when a new agreement was made by which 
the rate of interest was reduced and the unpaid coupons 
were exchanged for certificates at forty per cent of their 
face value. Payments were resumed and were main- 
tained until October, 1901, when a financial crisis caused 
by high rates of exchange and falling coffee prices again 
forced the government to suspend them. For nearly ten 
years the bondholders were put off, usually on the ground 
that the Repubhc was unable to pay as much as its 
creditors asked. Each administration made an effort to 
settle the matter by securing a reduction of the debt, but 
refunding contracts made with Speyer and Company in 
1905 and with the National City Bank of New York in 
1909 were rejected by the Congress. Finally, however, 
the pressing need for refunding the internal debt, which 
bore ruinous rates of interest and was increasing alarm- 
ingly every year, led the government to make a new 
contract with Mr. Minor Keith in 1911. This provided 
for a bond issue of £1,617,200, bearing four per cent in- 
terest for the first ten years and five per cent thereafter, 
to refund entirely the principal and the unpaid interest 

* Message of President Jimenez to Congress, 1911. 



292 THE FIVE REPUBLICS 

of the old debt, which, even with the numerous previous 
reductions, amounted to £2,710,293 by the end of 1910. 
The creditors accepted the arrangement, and the bonds 
were taken by an international syndicate, formed by 
bankers in New York, London, Hamburg, and Paris. 
The interest was secured by the customs revenues, the 
administration of which was to be taken over by the 
syndicate in case of default. As soon as the Congress 
had ratified this agreement, another loan of 35,000,000 
francs at five per cent, issued at eighty, and secured by 
a mortgage on the aguardiente monopoly, was arranged 
in Paris for the payment of the internal debt. Since 
1911, the service of these obligations has been maintained 
with scrupulous regularity. The total foreign debt of 
the Eepubhc on December 31, 1915, was 31,478,392.27 
colones, or $14,641,112.68 American gold.^ 

In Nicaragua, .£285,000 in six per cent bonds secured 
by a mortgage on the National Railway had been issued 
in 1886. Payments were suspended on these in 1894, 
and an arrangement was made in 1895 by which the 
interest was reduced to four per cent. In 1904, another 
six per cent loan, to the amount of $1,000,000 gold, 
was negotiated with Mr. Weinberger of New Orleans. 
Both of these debts were paid in 1909 by means of an 
issue of £1,250,000 at six per cent contracted for by 
the Ethelburga Syndicate of London. The interest on 
the Ethelburga loan was reduced to five per cent in 1912, 
through the good offices of the two New York banking 
firms which had undertaken the reorganization of the 
currency, on condition that these firms continue to ad- 
minister the customs revenues of the RepubHc, by which 
the bonds were secured. The total foreign debt of 
Nicaragua on December 31, 1915, was as follows : ^ 

* Costa Rica, Memoria de Hacienda, 1915. This sum includes certain minor 
obligations to correspondents in New York, London, and Paris. 

2 This does not include the accrued interest, which now amounts to a 
considerable sum, as the service of the loans has been suspended since 1914. 



OF CENTRAL AMERICA 293 

Ethelburga bonds (£1,179,620) $5,740,131 

Debt to Brown Brothers and Seligman 1,060,000 

Total $6,800,131 

Honduras is now the only one of the Central American 
republics which has not effected some adjustment of 
its foreign debt. This country, on January 1, 1916, owed 
to foreign creditors the immense sum of £25,407,858,^ 
arising from loans contracted in London and Paris in the 
years 1867-70. Bonds to a nominal value of £5,398,570, 
and bearing from five to ten per cent interest, were 
issued at that time for the construction of an inter- 
oceanic railroad from Puerto Cortez to the Gulf of 
Fonseca. The greater part of the money received from 
the investors in these securities seems to have been di- 
vided between the officials of the Republic and the 
promoters, with the result that the sum which finally 
found its way into the national treasury was sufficient 
only to build ninety kilometers of the railroad. The 
payments of interest, which until that time had been 
made out of the principal of the loan, were suspended in 
1872, and the quotation of the bonds on the European 
exchanges dropped rapidly from 85 >^^ to 1>^^ of their 
face value.' A few half-hearted efforts to enter into 
negotiations with the bondholders have been made during 
the years which have since intervened, but the Repubhc 
has shown little inclination to make good its obligations, 
and there have even been occasional propositions to 
repudiate the debt altogether, because of the fraud which 
accompanied its flotation. Meanwhile the government 
has been unable to make arrangements for the extension 
of the National Railway into the interior, because of 
the hen held by the bondholders upon the line, and it 

^ Report of the Council of the Corporation of Foreign Bondholders, 1915, 
p. 207. 

^Honduras, Boletfn Legislative, April 19, 1911. (Quoting irom the 
Moniteur des Rentiers of Paris.) 



294 THE FIVE REPUBLICS 

has also been unable to obtain new loans for carrying 
out other internal improvements. The foreign debt has 
thus been one of the principal factors which have re- 
tarded the Republic's economic advance. 

Early in 1909, a plan for the settlement of the debt 
was arranged by the British minister in Central America, 
but its consummation was prevented by the protest of 
the United States, which insisted that provision must 
at the same time be made for the adjustment of certain 
American claims. An arrangement suggested by J. P. 
Morgan and Company was therefore substituted for the 
British scheme. The New York bankers agreed to 
purchase the old bonds at the rate of £15 in cash for 
each £100 of the old bonds with their accrued interest, 
on condition that the United States government be a 
party to the agreement under which this was done. 
After some delay, a treaty was signed on January 10, 
1911, by Secretary of State Knox and the Minister of 
Honduras at Washington, in accordance with which the 
United States was to assist Honduras in obtaining a loan 
secured by her customs duties, which were to be admin- 
istered, until the bonds were paid, by a collector general 
nominated by the State Department. The treaty was 
rejected by the Honduranean Congress on January 31, 
1911.^ After the Bonilla revolution, another attempt 
was made to arrange for the loan, but there was such 
strong opposition to the treaty in the American Senate 
that nothing could be accomplished. In February, 1912, 
J. P. Morgan and Company withdrew from the negotia- 
tions, and a syndicate of New Orleans bankers took their 
place. The treaty, however, was never ratified, and the 
plan for a new loan was finally abandoned. 

At the Pan American Financial Conference in May, 
1915, the delegates from Honduras announced that their 

^ The treaty was exactly similar to that signed in the same year by the 
United States and Nicaragua. For the text, see the American Journal of 
International Law, Vol. 5, supplement, p. 274. 



OF CENTRAL AMERICA 295 

government was ready to increase the customs duties 
and the banana export tax to a point where they would 
yield an additional sum of $410,000 gold each year, 
which might be set aside for the service of the foreign 
debt. As the holders of the bonds have indicated their 
willingness to negotiate upon this basis, there seems to 
be reason to hope that an adjustment will eventually be 
brought about which will place the credit of the Republic 
on a sound basis/ Until this is done, it will be impossible 
to build railroads or to carry out the other internal im- 
provements which are indispensable for the development 
of the country. 

The failure of the Central American governments to 
fulfill their obhgations to foreign creditors is not due 
entirely to a listless sense of national honor, for in many 
cases there has been serious doubt whether these obliga- 
tions should be regarded as entirely valid. The circum- 
stances under which the majority of the public debts 
were contracted were such that the governments have 
felt a strong reluctance to recognize their duty to repay 
them in full. The bonds, bearing heavy rates of interest, 
were usually purchased in the first place at a consider- 
able reduction from their face value, and the speculators 
who floated them took advantage of the ignorance or 
the cupidity of the agents with whom they negotiated 
to defraud the borrowing governments of large sums. 
A large part of the product of the issue, in fact, seems 
in many cases to have been retained by the underwriters 
or divided by them with the Central American officials. 
Subsequent administrations were naturally unwilling to 
repay sums from which the country as a whole had never 
received the benefit, especially as the service of the loan 
involved a heavy and in some cases intolerable burden 
upon the impoverished treasury and deprived the govern- 
ment of resources which were sorely needed for the 

^ See the 1915 Report of the Council of the Corporation of Foreign Bond- 
holders. 



296 THE FIVE REPUBLICS 

maintenance of order and the promotion of internal 
improvements. 

One of the influences which have most disastrously- 
affected the government finances and the credit of the 
Central American republics during the last generation 
has been the depreciation of their currencies. Until the 
last decade of the nineteenth century, the money of the 
Isthmus had been based upon the silver dollar, sub- 
divided into eight reales or one hundred cents. Each of 
the five countries had its own coinage, but foreign money, 
especially from other Latin American states, was or- 
dinarily accepted at its face value. When the market 
price of silver declined, as it did with great rapidity after 
1890, there was a serious disturbance both of the foreign 
commerce and of the finances and credit of the five 
governments, and this disturbance was intensified bj^ 
a further depreciation of the currency, in Guatemala, 
Costa Rica, and Nicaragua, by the issue of irredeemable 
paper money. For a number of years, rates of exchange 
fluctuated widely, with a general upward tendency, and 
it became increasingly difficult for merchants to pay their 
bills in foreign countries and for the governments to meet 
the service of their loans. Costa Rica, and later Nica- 
ragua, succeeded in establishing a currency on a gold 
basis, but in the other republics the situation grew more 
and more difficult until the outbreak of the European 
war in 1915. This catastrophe caused the rate of 
exchange upon New York to rise from 25 to 100 per 
cent in each of the five countries, and made necessary 
a suspension of payments upon the foreign debt in two 
of them. 

Several causes have contributed to the disorganization 
of the Central American currencies. The fallacies which 
have at times caused unfortunate experiments with the 
monetary systems of other countries have been as at- 
tractive in Central America as elsewhere, and every 
financial or commercial depression has seen demands. 



OF CENTRAL AMERICA 297 

which have usually been acceded to, for an increase in 
the circulating medium. The banks, whose notes form 
the larger part of the currency in each state, have been 
subject to little effective regulation, and have in some 
cases been abetted by the governments in flooding the 
country with worthless paper money. By unscrupulous 
speculation in foreign exchange, moreover, they have 
often done much to cause unnecessarily violent fluctua- 
tions in the premium on gold. At the present time, laws 
relieving the banks of their obligation to exchange their 
notes for gold or silver are in force in Guatemala, Sal- 
vador, Nicaragua, and Costa Rica. The factor which 
has done most to disorganize the monetary systems of 
the five republics, however, has been the inability of the 
authorities to resist the temptation to use the deprecia- 
tion of the currency as a source of revenue. There is 
no easier method of raising money for pressing needs 
than the issue of government paper or the granting of 
special privileges to the banks in return for loans; and 
few of the countries have as yet learned that such a 
policy in the long run does far more harm than good. 
The worst currency system of the Isthmus is that of 
Guatemala, where silver coin has entirely disappeared 
from the circulation within the last twenty years. On 
assuming office in 1898, President Estrada Cabrera 
found himself confronted by serious financial difficulties 
arising from the extravagance of his predecessor and 
the business depression from which all of the Central 
American countries were at the time suffering. In order 
to provide funds, the new administration resorted to what 
was practically an issue of unsecured paper money. In 
return for a large loan, drawn in part from the reserves 
which guaranteed their circulation, the banks were re- 
lieved of their obligation to redeem their notes in silver, 
and a large issue of new notes, guaranteed solely by the 
claims of the banks against the government, was made 
at the same time through the so-called Comite Bancario. 



298 THE FIVE REPUBLICS 

Subsequent decrees made all debts payable in paper even 
though the contracts expressly provided for payment in 
silver. The redemption of the bank-notes has never been 
attempted, and further issues have been made from time 
to time until the amount in circulation, on January 1, 
1916, was more than $160,000,000/ The money depre- 
ciated rapidly. Just before the outbreak of the Euro- 
pean war, the paper peso was worth about five cents 
in gold, but in August and September, 1914, the dif- 
ficulty of obtaining drafts on foreign countries forced 
the rate of exchange from 20 to 1 to 40 to 1. It has 
remained approximately at this point since that time, 
although it has fluctuated considerably, sometimes rising 
or falling as much as thirty per cent within a few 
weeks. 

The circulating medium is now in a very bad condition. 
The notes of the smaller denominations are dirty and 
torn almost beyond recognition, and in quantity they fall 
far short of supplying the necessities of commerce. The 
subsidiary coinage, which consists of nickel and copper 
pieces of 12^ and 25 cents, is also insufficient in quan- 
tity, and it is supplemented in ordinary transactions by 
tokens issued by business houses and municipalities, 
tram-car tickets, and postage stamps. This state of 
affairs naturally causes great inconvenience to persons 
engaged in commerce on a small scale. 

The fluctuations in the rate of exchange make business 
transactions very difficult, for merchants who handle 
imported goods must change their prices from day to 
day if they are to avoid loss, and must at the same time 
face the greatly decreased purchasing power of the 
masses of the people when the money in which wages 
and salaries are paid depreciates. There is a growing 
tendency to quote prices and make transactions in 
United States currency, of which there is a large amount 
in circulation. 

* U. S. Commerce Reports, Supplement 39a, September 2, 1916. 



OF CENTRAL AMERICA 299 

Proposals for reforming the currency have been made 
from time to time, but none of them have been taken 
up by the government. The reintroduction of a metal 
standard, in fact, has been opposed by one of the most 
influential classes in the community. The coffee planters 
and other employers of labor have benefited greatly by 
the rising rate of exchange. Despite the depreciation 
of the currency, they have raised the wages of their 
employees comparatively little, and the latter, bound by 
contracts from which the decline in their earning power 
made it more difficult than ever for them to escape, have 
been unable to protest. The result has been an enormous 
increase in profits, for wage costs have been reduced, 
while the coffee has continued to be sold for gold in 
the European and North American markets. The gov- 
ernment also benefits by the present situation, for the 
revenues from the customs houses are received in gold, 
and the employees are paid in paper, with the result that 
there is a yearly increasing surplus in favor of the 
treasury. The effect of this condition on the morality 
of the underpaid officials has already been mentioned. 

In Nicaragua, monetary conditions were much similar 
to those in Guatemala before the reform carried out by 
the New York bankers in 1912. President Zelaya had 
driven the silver out of circulation early in his adminis- 
tration by the issue of legal tender treasury notes, and 
the value of the peso, after his fall, had sunk to about 
five cents gold. The estabhshment of a new currency, 
under the 1911 treasury bills agreement, has been de- 
scribed in Chapter XI. At the beginning of the 
European war, the new money was exchangeable at 
par for sight drafts on New York. The inability of 
the government to replenish the exchange fund against 
which these drafts were drawn forced the National Bank 
to suspend their sale for a time, with the result that the 
premium on American exchange rose to thirty per cent 
early in 1915. More recently, however, the National 



300 THE FIVE REPUBLICS 

Bank has resumed the sale of drafts at par with its 
own funds. 

Honduras is still upon a silver basis. Silver coin 
circulates at its intrinsic value, and bank-notes, which 
are generally used in commerce, are accepted at par in 
the cities and towns, although the country people as a 
rule prefer to use specie. The Republic has coined little 
money of its own, but a considerable part of the silver 
of Guatemala and Nicaragua found its way over the 
border when those republics fell under a paper regime, 
and pesos, or dollars, from Salvador, Chile, and Peru 
are in general use. The monetary system of the 
Republic is thus better than that of the majority of its 
neighbors, but it can nevertheless hardly be said to be 
sound. The rise and fall of the price of silver in the 
world's markets involves fluctuations in the rate of 
exchange which are only less violent than in the case of 
an unsecured paper circulation, and cause much incon- 
venience and danger to merchants dealing with foreign 
countries. A part of the Repubhc's imports, which for 
several years past have exceeded the exports, are un- 
doubtedly paid for in silver coin, despite the restrictions 
on the export of specie. This tends to leave only sub- 
sidiary coins, of a lower standard of fineness than that 
of the pesos, in circulation, and to make it more difficult 
also for the banks to maintain their metallic reserves. 
Since the beginning of 1916, especially, the scarcity of 
exchange on New York, combined with the high price 
of silver in the foreign markets, has threatened to drain 
the country of its circulating medium, and has forced 
the government to forbid entirely the exportation of coin. 

The currency of Salvador was until very recently on 
a silver basis, but in August, 1914, the banks, whose 
notes formed a large part of the circulating medium, 
were allowed to suspend silver payments in order to 
safeguard their metalHc reserves, and the exportation 
of specie was forbidden. Silver coin has now almost 



OF CENTRAL AMERICA 301 

disappeared from circulation, and bank-notes and small 
nickel coins have taken its place in all transactions. The 
fact that the banks still maintain a large reserve for 
the resumption of specie payments after the war, how- 
ever, has prevented a serious depreciation, although the 
rate of exchange has fluctuated considerably. 

In Costa Rica, the depreciation of the currency had 
begun as early as 1882 with the issue of government 
paper and bank-notes which gradually drove silver coin 
out of circulation. Rates of exchange rose slowly until 
1896, when President Rafael Yglesias procured the 
passage of a law which provided for the establishment 
of a gold standard. A unit called the colon, worth about 
46 }4 cents in United States currency, was adopted, and 
certificates were gradually exchanged for the old money 
at the rate of one colon for one peso. On July 15, 
1900, the government was able to begin the redemption 
of these certificates in gold coin. A new law, mean- 
while, had required the banks to guarantee their notes 
by adequate reserves of specie, so that the currency 
of the Republic was placed upon a sound basis. At the 
outbreak of the European war, however, the govern- 
ment relieved the banks of their obligation to redeem 
their notes in gold. A little later, finding that its 
revenues were falhng off, and being unable to arrange 
for a loan with the existing banks, it granted to a new 
institution, the Banco Internacional, the privilege of 
issuing inconvertible notes secured by government bonds. 
The result was a rapid depreciation of the currency. 
The rate of exchange on New York rose from 218 on 
August 1, 1914, to 260 in January, 1915, and to nearly 
300 a few months later. It has been reduced somewhat 
since that time, and a metallic reserve has gradually 
been accumulated by the Banco Internacional, so that 
there seems to be ground for hoping that the paper will 
be redeemed at par when normal conditions are restored. 

The Central American republics will have to depend 



302 REPUBLICS OF CENTRAL AMERICA 

upon the assistance of foreign capital both for the re- 
adjustment of their foreign debts and the reorganization 
of their monetary systems, — reforms for which the need 
will become pressing soon after the conclusion of the 
war. The problem of placing their credit on a sound 
basis is one of the most important which confronts them 
today. If their economic development is to continue, 
they will require new loans from abroad, not only for 
refunding old obligations and stabilizing their depre- 
ciated and fluctuating currencies, but also for building 
railways and roads, improving ports, and making other 
internal improvements. These new loans, probably, can 
be obtained to best advantage only in the United States, 
with the aid of the American government, for no other 
country has the interest which we have in the solvency 
and the economic welfare of the Central American 
nations, and no other, while the Monroe Doctrine is 
maintained in its present form, is really in a position 
to guarantee to its bankers the full measure of pro- 
tection which is necessary to make loans to the repubhcs 
of the Isthmus a safe investment. 



CHAPTER XIV 

THE INFLUENCE OF THE UNITED 
STATES IN CENTRAL AMERICA 

The Economic and Political Interests of the United States in Central 
America — Intervention in the Internal Affairs of the Five Republics — 
Antagonism in Central America — Beneficial Effects and Shortcomings of Our 
Policy — How the United States can Assist in Promoting Good Government 
and Economic Development — Moral Influence of the United States — The 
Ultimate Object of Our Policy. 

The events of the last ten years have made it clear 
that the relations between the United States and Central 
America must inevitably be closer than our relations 
with countries whose well-being is of less vital im- 
portance to us. However much we may dislike inter- 
fering in the internal affairs of our neighbors, we cannot 
remain indifferent when disorder and misrule paralyze 
agriculture and commerce and threaten to provoke 
European intervention in a region where our political 
and economic interests are so great as they are in the 
repubhcs bordering on the Caribbean Sea. Both for our 
own security and for the sake of helping neighbors with 
whom we are united by powerful ties of proximity and 
common interests, we must inevitably use our influ- 
ence more and more to aid the Central American 
repubhcs in developing stable political institutions 
which will insure their prosperity and their continued 
independence. 

The interests of the United States in the Isthmus are 
far greater than those of any other foreign power. In 
the first place, like the other countries around the Carib- 
bean Sea, the five republics are one of the most promising 
fields for the expansion of American commerce and the 

303 



304 THE FIVE REPUBLICS 

investment of American capital. While no one of them 
is an important customer of itself, together they make 
up a market which will one day be of very great value. 
Our exports to them have increased greatly in recent 
years and especially since the beginning of the European 
war, and our imports from them are growing steadily. 
Only a very small part of the food-producing possibilities 
of the tropics, moreover, has as yet been reahzed, and 
economists say that it is not improbable that the people 
of the temperate zone will be forced to rely upon their 
equatorial neighbors for an increasingly large proportion 
of their provisions in the not distant future. If this is 
so, the development of that part of the tropics which 
is naturally tributary to us commercially cannot be a 
matter of indifference. This development can only take 
place with the improvement of political conditions, and 
with the introduction of capital from wealthier countries 
which the establishment of peaceful government will 
make possible. 

The estabhshment of peaceful government in the 
Isthmus is a matter in which we are deeply interested 
for political reasons. The Monroe Doctrine must always 
be a paramount principle of our foreign policy, at least 
in so far as it deals with the countries of the Caribbean, 
because the exercise of political influence in that region 
by a foreign power could not but be a constant menace 
to our peace and security. Several European nations, 
however, have extensive and legitimate interests in 
Central America, for many of their citizens reside and 
own property there and most of the foreign debt of 
each of the five republics is held in London or Paris. 
It is impossible to expect that they should remain in- 
active when these investments are made worthless by 
internal disorders or by the arbitrary action of ir- 
responsible native rulers. Whatever one may think of 
the moraHty of the protection of foreign investments 
by intervention and the collection of public debts by 



OF CENTRAL AMERICA 305 

force, this is the estabhshed practice of most civilized 
nations, and it is a practice which finds much justi- 
fication in the conditions which exist in certain Central 
American countries. The landing of troops and the 
seizure of ports by a foreign power, so near our shores 
and in the immediate vicinity of the Panama Canal, 
can hardly fail to endanger the most vital interests of 
the United States, because of the manifold opportunities 
which such measures afford for exerting an influence 
over internal politics. The control of the pohcy of one 
of the Central American governments by a European 
chancellory or the grant of special economic privileges 
would of course be intolerable to the United States. 
That such consequences might follow even a simple 
intervention to enforce the payment of debts, is all too 
evident from events which have occurred in other parts 
of the world. The American government cannot, how- 
ever, oppose measures adopted by European powers for 
the protection of the legitimate interests of their nationals 
without itself assuming a certain responsibility for the 
safeguarding of foreign life and property. Even suppos- 
ing that it were sufficiently powerful to prevent other 
governments from intervening, it could hardly allow its 
protection to be made a cloak for the confiscation of 
foreign property and the repudiation of bonded debts 
by unscrupulous professional revolutionists like those 
who have at one time or another been in power in each 
of the Central American countries. 

The United States has already gone very far in its 
attempts to assist its Central American neighbors to 
attain political and financial stability. At first it limited 
its efforts to friendly advice and mediation. By par- 
ticipating in the Washington Conference of 1907, how- 
ever, it became in a measure responsible for the enforce- 
ment of the conventions drawn up by that body, in so far, 
at least, as they related to the discouragement of revolu- 
tions, the compulsory arbitration of disputes, and the 



306 THE FIVE REPUBLICS 

neutralization of Honduras/ The continual violation of 
the provisions of the Washington Treaties by President 
Zelaya of Nicaragua led President Taft to break off 
relations with him in 1909 and to intervene in the revo- 
lution of that year in such a way that the fall of the 
Liberal administration was inevitable; and the financial 
and military assistance which it was necessary to render 
to Zelaya's successors, in order to prevent the Republic 
from falling into a state of anarchy, imposed new and 
still greater responsibilities upon the United States. 
Since 1912, when a revolt against the established 
authorities was suppressed by American troops, the 
Conservative government at Managua has been kept 
in office by the presence of a force of American 
marines, and the State Department has become deeply 
involved in assisting the Republic to adjust its financial 
affairs. The United States has recently acquired new 
interests in the Isthmus by the treaty giving it the right 
to construct an interoceanic canal through Nicaragua and 
to establish a naval base in the Gulf of Fonseca. Mean- 
while outbreaks of disorder have been discouraged in 
all parts of the Isthmus by the influence exerted by 
the authorities at Washington against violations of the 
1907 conventions and by their refusal to recognize gov- 
ernments which came into power through revolution. 
The policy of the United States has aroused strong 
antagonism in Central America. The people of the 
Isthmus are by no means convinced of the disinterested- 
ness or the friendly intentions of their powerful neighbor, 
and it would be difficult to persuade them that the 
interference of the latter in their affairs will ultimately 
be for their own good. Their hostility is due partly 
to the inevitable opposition among a proud and sensitive 

^ " The Treaties and Conventions of Washington of 1907, . . . were con- 
ceived, debated, and concluded through the friendly intervention of the Govern- 
ment of the United States of America. These conventions have, therefore, the 
moral guaranty of that great nation." (Case of Costa Rica against Nicaragua 
before the Central American Court of Justice, 1916, p. 9.) 



OF CENTRAL AMERICA 307 

people to foreign intervention in their domestic concerns, 
and partly to the failure of the American government 
to convince the Central Americans of the altruism of 
its aims. Our State Department has had no definite, 
vi^ell-understood, and energetically enforced policy, but 
has been forced from step to step by circumstances 
as they have arisen, and its course of action has not 
always been such as to inspire confidence in the purity 
of its motives. The attitude of the American govern- 
ment in the revolution of 1909-10 in Nicaragua, for 
example, was hardly consistent in view of its cham- 
pionship of the Washington Conventions, notwithstand- 
ing the excellent reasons which the United States as well 
as the Central American countries had for desiring 
President Zelaya's fall. The "Dollar Diplomacy" of 
Mr. Taft's administration was regarded throughout the 
Isthmus as the opening wedge for the political absorp- 
tion of the five repubhcs by the United States. This 
feeling caused the emphatic rejection of the proposed 
loan treaty by the Honduranean congress, and aroused 
a violent opposition to the financial policy of the Con- 
servative government in Nicaragua, — an opposition 
which was greatly intensified by the fact that the 
authorities who signed the loan contracts and who 
turned over to American banking concerns the control 
of the customs houses, the currency system, and the 
national railways, were maintained in office by the armed 
forces of the United States. The steps taken more 
recently in connection with the canal treaty have been 
regarded by many Central Americans as final proof of 
the aggressive intentions of the American government. 
The United States has nevertheless achieved one of 
its main objects, in that revolutions and international 
wars have been checked throughout the Isthmus. There 
has been no very serious disturbance of the peace since 
the suppression of Mena's revolt in Nicaragua in 1912. 
This has been due partly to the efforts of the State 



308 THE FIVE REPUBLICS 

Department to secure the strict observance of those 
provisions of the Washington Conventions which restrain 
the Central American repubhcs from intervening in one 
another's internal political affairs, and from allowing 
their territory to be made the base of operations against 
neighboring governments, but more to a fear on the 
part of native political leaders that a renewal of the 
disorderly conditions which formerly existed would lead 
to American intervention and to the domination of their 
affairs, as in Nicaragua, by an outside power. This 
apprehension has exerted a most valuable restraining 
influence on enemies of the established order in many 
countries which had hardly ever known five years of 
continuous peace before 1912. There were, it is true, 
small revolts in Nicaragua and Guatemala in 1915 and 
1916, but they were easily suppressed by the authorities, 
and they hardly disturbed the tranquilHty of the greater 
part of the territory of the republics in which they 
occurred. Their insignificance showed that no large or 
influential section of the opposition party had partici- 
pated in them. As the result even of this short era of 
peace, there has been a marked improvement in economic 
and political conditions in many sections of the Isthmus. 
The poHcy of refusing to recognize any forcible change 
of government, however, is a very difficult one to carry 
out consistently. It would be manifestly impossible to 
prevent all revolutions. An attempt to do so would 
involve continual armed intervention in the internal 
affairs of the Central American republics, which would 
be as burdensome and distasteful to the United States 
as it would be intolerable to the people of the Isthmus. 
It is often equally impossible, and sometimes exceedingly 
disastrous, to refuse to recognize a government which 
has sprung from a revolution. After one administration 
has fallen and its successor has established itself firmly 
in power, the refusal of the United States to recognize 
the new authorities only weakens them, and thus opens 



OF CENTRAL AMERICA 309 

the way for a complete disintegration of the political 
organization, without advancing appreciably the cause 
of constitutional government. The restoration of the 
old regime is rarely either possible or desirable. The 
ousted authorities, if they themselves secured office, Hke 
almost all Central American administrations, as the re- 
sult of a successful revolution or an election controlled 
by the government, can hardly lay claim to a higher 
degree of legality than their successors, and a president 
who has once lost his prestige and his following is not 
often able to re-establish a strong and efficient govern- 
ment, even with foreign support. 

The prevention of chronic civil war is indeed the 
first great requisite for the improvement of poHtical con- 
ditions in Central America, but even peace will be a 
doubtful blessing in the long run if it is secured by the 
maintenance in office by outside influence of presidents 
who are responsible to no one and who have nothing to 
fear from popular opposition. The mere discourage- 
ment of revolutions offers no solution for the most 
serious of Central America's pohtical problems, for it 
provides no guarantee of good government and no peace- 
ful method of removing authorities whose rule may have 
become intolerable. 

The responsibihty resting upon the United States is 
the more serious, because the American government is 
not infrequently called upon actually to decide who shall 
be president of one or the other of the five republics. 
Even an intervention to protect foreign life and property 
often determines, as a matter of fact, the outcome of a 
civil war, and the influence upon internal politics is still 
greater when the United States uses diplomatic pressure 
or force to prevent a revolution or to bring about an 
agreement between the contending factions. In either 
case, the United States practically imposes upon the 
country affected the rule of one or the other political 
group. It is impossible to intervene merely to prevent 



310 THE FIVE REPUBLICS 

disorder, and then leave to the people the choice of theu' 
own rulers, for elections, as we have seen, are nothing 
more than a form for putting into effect the choice of 
the government already in office. It would be foolish 
to attempt to force democratic institutions upon the less 
advanced republics of the Isthmus at the present time. 
No president of one of those countries, however sincere 
he might be in his purpose, could really hold a free 
election, and any attempt to do so would probably end 
in bloodshed and disaster. An election supervised by 
the United States, which was proposed as a solution of 
;the recent presidential problem in Nicaragua, would be 
equally unsatisfactory as a means of establishing a new 
administration. Aside from the difficulty of ascertaining 
the wishes of a nation where the majority of the voters 
have no interest in pohtical affairs, there are so many 
opportunities for fraud and for the exercise of pressure 
by the government and by the local officials at every 
stage of the campaign, as well as in the election itself, 
that it would be practically impossible to guarantee the 
opposition party a fair chance. An administration which 
has once obtained mihtary control can perpetuate itself 
indefinitely under constitutional forms until its opponents 
become sufficiently strong to overthrow it by force of 
arms. 

The United States, therefore, can hardly assist one 
party in securing and holding the control of the govern- 
ment, without assuring itself that the men whom it thus 
keeps in office are acceptable to the people under their 
rule, and that they administer the affairs of their country 
with at least a reasonable degree of honesty and ef- 
ficiency. This can only be done by establishing an 
administration which fairly represents the best elements 
in the community. It should not be impossible to secure 
such an administration by an agreement between the 
party leaders, who for all practical purposes represent 
the country in political affairs. Compromise between the 



OF CENTRAL AMERICA 311 

various factions, which is the only practicable means, 
except revolution, of changing the higher officials, is 
the end towards which the diplomatic efforts of the 
United States should be directed in cases where cir- 
cumstances make a reorganization of the government 
inevitable. The more respectable and patriotic leaders 
of all parties would far prefer an adjustment of this 
kind to a continuation of civil war, and even those who 
might be unwilhng to subordinate their own ambitions 
to the general welfare would probably accept it rather 
than incur the danger of armed intervention by the 
United States. 

The friendly mediation of the United States would 
do much to improve the political conditions of the 
Isthmus if it were directed towards strengthening the 
influence of the better element in the educated class. 
Numerous intelligent and patriotic men of high pohtical 
ideals are to be found in each country, but they have 
not hitherto had so large a share in the direction of 
affairs as they should because the revolutions have 
brought to the front military leaders and demagogues 
rather than statesmen. Even where men of the highest 
character have been at the head of the government, as 
has not infrequently been the case, they have found 
themselves forced to place corrupt or unworthy men 
in office for pohtical reasons, because they have been 
unable to free themselves from dependence upon the 
support of the professional politicians. With the greater 
stability in the government which will necessarily result 
from the discouragement of revolutions, however, the 
less turbulent elements should become more and more 
prominent, especially if they are supported by the in- 
fluence of the United States. 

The United States can at the same time materially 
assist its Central American neighbors by aiding them 
in securing new loans for the reorganization of their 
finances and the development of their natural resources. 



312 THE FIVE REPUBLICS 

The unenviable record of Central American bonds 
makes it unlikely that any bankers, whether American 
or European, would lend money to one of the five 
republics, unless it were on the most onerous terms, 
without an effective guarantee of the protection of their 
government in case of default. Considering the close 
relation between the solvency of the countries of the 
Isthmus and the maintenance of the Monroe Doctrine, 
it is evident that the United States must eventually 
exert its good offices in cases where it has been impossible 
to reach an agreement with foreign creditors by any 
other means. 

In Santo Domingo and Nicaragua, the service of loans 
made by American bankers has been guaranteed by 
placing the administration of the customs duties in the 
hands of officials appointed by or at least approved by 
the State Department. This is far from being an en- 
tirely satisfactory solution of the problem. The col- 
lector ships thus far established have provided a highly 
satisfactory guarantee for the foreign creditors, and have 
decidedly increased the efficiency of the customs service, 
but their existence has been very distasteful and of 
doubtful advantage to the native community. Graft is 
abolished in the customs houses themselves, but there is 
nothing to prevent that portion of the receipts which is 
not used for the service of the foreign debt from being 
misspent. Revolutions are not done away with, for 
revolutionists fight, not, as is sometimes said, for the 
possession of the customs houses, but rather for the 
control of the appointing power and of the revenues, 
which the customs officials must necessarily turn over 
to them when they become the de facto government. 
The chief result is the imposition upon the American 
government of a heavy burden of responsibility which 
forces it to intervene continually in the internal affairs 
of the native governments, and which often leads to 
friction with the officials and to a feeling of dislike 



OF CENTRAL AMERICA 313 

towards the United States in the community at large. 
The acceptance of foreign financial control, moreover, 
inevitably involves a lessening of the sense of inter- 
national responsibihty and a certain loss of national 
self-respect which cannot but react unfavorably upon 
internal politics. 

It may well be questioned whether the bondholders 
could not be satisfactorily protected by other methods. 
If, for instance, the foreign loan were secured by the 
hypothecation of the customs revenues or of some other 
easily collected source of revenue, with a promise of the 
protection of the State Department in realizing the 
guarantee of the loan in case of default, the interests 
of the creditor would be adequately protected, while the 
Central American governments, so long as they dealt 
honestly by the bondholders, would be spared the hu- 
miliation of having to place one of their principal func- 
tions in the hands of a foreign official who was in no 
way subject to their control. This is the basis upon 
which Costa Rica's external debt rests at present, except 
that no foreign government participated officially in the 
arrangement. There would probably be little difficulty 
about maintaining the service of the loan under such 
conditions. The majority of the Central American 
governments have shown little regard for their credit in 
times past, but they would probably manifest little in- 
clination to default if their debts were reorganized on a 
fair basis, and if they were aware that a failure to pay 
would involve the seizure of their customs houses. 

It is highly desirable that the United States should 
exercise a measure of control over the operations not 
only of American bankers but of other American cor- 
porations which do business in the Isthmus. The eco- 
nomic development of the last twenty-five years has 
created a situation in which some of the five republics 
are almost powerless to protect themselves against the 
oppression and greed of foreign interests, for corpora- 



314 THE FIVE REPUBLICS 

tions like the great fruit companies and the raiboad 
companies are able to bring to the support of their 
projects financial resources which far exceed those of the 
local government or of any group of natives. Some of 
these concerns, by the corruption of officials or by the 
unscrupulous use of their control of transportation 
facilities, have obtained special privileges which have 
been an obstacle to the legitimate business of other for- 
eigners and to the development of the community as a 
whole. Moreover, serious international difficulties have 
not infrequently arisen when subsequent governments 
have attempted to annul or to modify these concessions. 
Only a more careful supervision of the contracts entered 
into by American concerns with native officials, who are 
not always above temptation and who are in any event 
rarely in a position to ascertain the financial responsi- 
bility of the concerns with which they are dealing or the 
ultimate effects of the privileges which are asked, can 
insure the United States against the possibility of being 
forced to use its power to protect unscrupulous specu- 
lators and predatory corporations in the exercise of 
rights which, even though legally acquired, are in many 
cases extremely unfair and injurious to the countries 
which have granted them. 

The same interests which have obtained inequitable 
concessions by dishonest methods have too often sought 
to secure influence with the native governments by 
fomenting and assisting revolutions against presidents 
from whom they cannot obtain what they desire. In 
recent years influences of this kind have done even more 
to cause internal disorder in some of the republics than 
the intervention and intrigues of other Central American 
governments. Honduras has been the chief sufferer, 
for the nimierous outbreaks which occurred in that 
Republic between 1907 and 1911 seem to have been 
financed in many cases by interests in New Orleans, 
and to have received valuable assistance from the foreign 



OF CENTRAL AMERICA 315 

colony on the North Coast. In Nicaragua also the in- 
discriminate granting of concessions on the one hand 
and the dissatisfaction among the foreign interests which 
were injured by these grants of special privileges on 
the other was one of the primary causes of the revolution 
of 1909-10. If permanent peace is ever to be estabHshed 
in the Isthmus, the encouragement of revolutions from 
outside, whether it be for the satisfaction of the ambition 
or the jealousy of petty despots in neighboring republics 
or for the pecuniary profit of unprincipled foreigners, 
must be repressed by every possible means. 

Much can be done to promote stable government in 
Central America by the consistent enforcement of the 
principles of the Washington conventions, for few revo- 
lutions, except those which originate in genuine popular 
discontent with the existing regime, would attain for- 
midable proportions if they were not allowed to use 
neutral territory as a base and if they received no 
assistance from other Central American countries or 
from friends in the United States. If the American 
government exerts its influence to secure the observation 
of the 1907 treaties, and at the same time adopts effective 
means for restraining its own citizens from disturbing 
the peace of the Isthmus, the position of constituted 
governments throughout Central America will be greatly 
strengthened. To be effective, such a pohcy must be 
vigorously enforced, and its one end, — to prevent revolu- 
tions and international wars in Central America, — should 
be pursued in such a way that there can be no suspicion 
of selfish objects or ulterior pohtical purposes. 

Much depends upon the character and the ability of 
the men who are sent to represent the United States 
diplomatically in the Central American capitals. Unless 
they are fitted for their positions by disposition and by 
training, their relations with the native governments can 
never be entirely satisfactory. An acquaintance with the 
character of the people and a command of Spanish are 



316 THE FIVE REPUBLICS 

of the first importance, for Central American political 
methods and the motives which govern the action of men 
and parties, incomprehensible at best to the average 
American, are entirely beyond the understanding of one 
who does not speak the language and is thus barred from 
association with any but a very small portion of the 
people. The cordiahty of our relations with the republics 
of the Isthmus depends to a very great extent upon 
the capacity of our agents to win the confidence and 
friendship of their people; and the extremely important 
position occupied by the United States minister in these 
countries, where he is forced to play a part far more 
influential than that which falls to the lot of the average 
diplomat, makes it an act of injustice to the Central 
American countries themselves to send ministers who are 
not properly qualified for their position. 

The influence and authority of the United States in 
Central America are very great, for there are few edu- 
cated men in the Isthmus who do not realize that the 
future of their countries will be determined almost en- 
tirely by their relations with their northern neighbor. 
The people of the five republics have always admired 
our civihzation and our institutions, and they have often 
turned to the American government, not only for pro- 
tection against European powers, but also for aid in 
adjusting their domestic difficulties. They have bitterly 
resented the poHcy of the last five years, which they 
have regarded as a menace to their independence, but 
their hostility to American intervention would to a 
great extent disappear if they were convinced that it 
was actuated by a desire to assist them and not by any 
purpose of expansion. Even those elements which are 
most jealously opposed to foreign control at present 
would not object so strongly to the exercise of foreign 
influence if they themselves profited by it, and most of 
the more intelligent and patriotic political leaders avow 
that they would welcome the assistance of the American 



OF CENTRAL AMERICA 317 

government in securing peace and stability in the 
Isthmus and in bringing about the Central American 
Union. 

While their political and economic interests have be- 
come so closely interdependent, cultural ties between 
the United States and Central America have also grown 
far stronger in the last quarter century as a result of 
the increasing prosperity of the coffee-producing coun- 
tries and the improvement in means of communication. 
The wealthier families of the Isthmus travel more and 
more in the United States, and a very large proportion 
of them send their children to be educated in our schools 
and colleges. English has taken the place formerly 
held by French as the most widely spoken foreign lan- 
guage, and North American news services and periodicals 
are the principal sources of information on events oc- 
curring in the outside world. The creation of ties of 
this kind will have more influence than treaties and 
diplomatic conferences in determining whether our rela- 
tions with Central America shall be friendly and mu- 
tually profitable rather than characterized by dictation 
and compulsion on the one side and bitter resentment 
on the other. 

The influence of North American civilization in the 
Isthmus, which is daily becoming stronger under present 
conditions, could be greatly increased if the missionary 
educational enterprise which has been so successful in 
the Orient could be turned in some measure to these 
countries at our own doors. The establishment by 
American philanthropic societies of institutions for higher 
education and for technical training in agriculture and 
engineering would perhaps do more than any other one 
factor could to improve both the economic and the 
pohtical conditions of the Isthmus. Many of the govern- 
ments have advanced far in the primary instruction of 
their people, but they have been prevented from making 
corresponding progress in higher education by the ex- 



318 THE FIVE REPUBLICS 

pense involved and by the lack of properly trained 
teachers. There is no form of assistance which the 
people of the Isthmus would appreciate more, and which 
would do more to convince them of the friendly inten- 
tions of their great neighbor. 

The political stability and the prosperity of the Central 
American countries have been the one great object which 
the United States has sought in its relations with their 
governments. Modern conditions have made the 
maintenance of peace and the development of commerce 
and natural resources in the Isthmus far more important 
to the American people than ever before. It is in- 
evitable, therefore, that the United States should exert 
a decided influence in the internal affairs of the five 
republics, so long as disorder and insolvency expose them 
to aggression by European powers. But it should never 
be forgotten that the ultimate purpose of the American 
policy is to enable the countries of the Isthmus to attain 
a position where they can manage their own affairs 
without outside interference. Careless talk about the 
ultimate absorption of these countries by the United 
States is as unwarranted as it is mischievous, for none 
of the measures thus far taken in any Central American 
state have had as their object or their logical outcome 
permanent political domination. If the efforts of our 
government to assist its weaker neighbors are to attain 
any measure of success, its sincerity and its freedom 
from any desire for territorial expansion must be placed 
beyond all doubt. 

The present political condition of the Isthmus is a 
transitory one, which is changing rapidly with the 
economic development of the country and the spread of 
education among the common people. If they are given 
a fair chance, the five republics will work out their own 
salvation, but they will not be aided in doing so either 
by the establishment of foreign protectorates over them 
or by the attempt of a foreign government to impose 



OF CENTRAL AMERICA 319 

upon their people responsibiUties of self-government for 
which they are not as yet ready. The ultimate solution 
of their poUtical problems must be sought m making a 
reaUtv the democratic institutions which each oi them 
already possesses on paper, by preparing the)^ people 
for the intelligent exercise of the suffrage When the 
people are fitted to take an active part m choosing their 
own officials, as they akeady do in Costa Rica and 
when they have learned the respect for the constitution 
and for the will of the majority which can only come 
with experience in self-government, there will be no 
need for foreign intervention to protect life and property 
from destruction at the hands of revolutionary armies 
To aid in bringing that time nearer should be one ot 
the primary aims of the foreign pohcy of the Umted 
States. 



BIBLIOGRAPHY 

of the more important historical and descriptive material dealing 
with Central America 

A. OFFICIAL DOCUMENTS. 

1. Publications of the United States Government, especially: 

Foreign Relations of the United States. 

Commerce Reports. 

Congressional Documents. 

Congressional Record. 

Annual Reports of the Navy Department. 

Treaties and Conventions of the United States. 

2. Publications of Central American governments. 

Each of the Central American Republics publishes the 
annual reports of the principal executive depart- 
ments, under the titles Memoria de Relaciones Ex- 
teriores, Memoria de Hacienda y Credito Publico, 
etc. Most of them also have statistical bureaus, 
which publish annual reports containing interesting 
although too often inaccurate material. They also 
publish official gazettes, collections pi. laws and 
treaties, and other material. 

B. HISTORICAL WORKS. 

1. General histories of Central America. 

Bancroft, Hubert Howe: History of Central America. 

(3 vols.) San Francisco, 1883-90. 
Fortier, A., and Ficklen, J. R.: Central America and 

Mexico. (Vol. IX of G. C. Lee's History of North 

America.) Philadelphia, 1907. 
Fuentes y Guzman, Francisco Antonio de: Historia de 

Guatemala, 6 Recordacion Florida. (Deals only 

with the sixteenth century.) Madrid, 1882-83. 
Gomez Carillo, Augustin: Estudio Historico de la America 

Central. San Salvador, 1884. 
: Compendio de Historia de la America 

Central. Guatemala, 1906. 
331 



322 BIBLIOGRAPHY 

Jaurros^ Domingo: History of Guatemala. (Translated 

from the Spanish.) London, 1823. 
Milla, Jose: Historia de la America Central, 1502-1821. 

(2 vols.) Guatemala, 1879-82. 
Montufar^ Lorenzo: Reseiia Historica de Centro America, 

(A collection of source material in 7 volumes.) 

Guatemala, 1878-87. 
Montiifar, Manuel: Memorias para la Historia de la 

Revolucion de Centro America. San Salvador, 1905. 
Squier, Ephraim G. Historia Politica de Centro America. 

Paris, 1856. 

2. Nicaragua. 

Gamez, Jose Dolores: Historia de Nicaragua. Managua, 
1889. 

3. Costa Rica. 

Mora, Manuel Argiiello: Paginas de Historia, Recuerdos 

e Impresiones. San Jose, 1898. 

Fernandez Guardia, Ricardo: Historia de Costa Rica: 

El Descubrimiento y la Conquista. San Jose, 1905. 
: Same, translated into English. New 

York, 1913. 
: Cartilla Historica de Costa Rica. San 



Jose, 1909. 

Fernandez, Leon. Historia de Costa Rica durante la 
Dominacion Espaiiola, 1502-1821. Madrid, 1889- 

' — : Coleccion de Documentos para la His- 
toria de Costa Rica. San Jose, 1881-83. 

Montero Barrantes, Francisco: Elementos de Historia de 
Costa Rica. (2 vols.) San Jose, 1892-94. 
The Mosquito Coast and the Nicaragua Canal. 

Keasbey, L. M.: Early Diplomatic History of the 
Nicaragua Canal. Newark, 1890. (Columbia Ph.D. 
dissertation.) 

: The Nicaragua Canal and the Monroe 

Doctrine. New York, 1896. 

Peralta, Manuel M. de: Costa Rica y Costa de Mos- 
quitos. Paris, 1898. 

Travis, Ira D.: History of the Clayton-Bulwer Treaty. 
Ann Arbor, I9OO. 

: British Rule in Central America. Ann 

Arbor, 1895. 

Williams, Mary W.: Anglo-American Isthmian Diplo- 
macy, 1815-1915. Washington, 1916. 



BIBLIOGRAPHY 323 

5. Walker's expeditions to Nicaragua. 

Doubleday, Charles William: The Filibusters' War in 
Nicaragua. New York, 1886. 

Lucas, D. B.: Nicaragua: War of the Filibusters. Rich- 
mond, Va., 1896. 

Montiifar, Lorenzo: Walker en Centro America. Guate- 
mala, 1887. 

Nicaise, Auguste: Les Filibustiers Americains. Paris, 

1861. 
Scroggs, William O.: Filibusters and Financiers. New 

York, 1916. 
Wells, William V.: Walker's Expedition to Nicaragua. 
New York, 1856. 

6. Miscellaneous material for more recent history. 

Buchanan, William I.: Report of the Central American 
Peace Conference, 1907. Washington (U. S. State 
Department), 1908. 

Corte de Justicia Centroamericana. Sent0ncia en el 
Juicio promovido por la Republica de Honduras 
contra las Republicas de El Salvador y Guatemala, 
1908. San Jose, Costa Rica, 1908. 

_ : Anales. San Jose, 1911- 

Council of the Corporation of Foreign Bondholders ; An- 
nual Reports. London. 

Crichfield, Geo. W.: American Supremacy. New York, 
1908. 

Espinoza, Rudolfo: Nicaraguan Affairs. Memorial to 
the U. S. Senate. San Jose, Costa Rica, 1912. 

Harrison, F. C, and Conant, C. A.: Report Presenting a 
Plan of Monetary Reform for Nicaragua. Pre- 
sented to Messrs. Brown Brothers and Company and 
Messrs. J. and W. Seligman and Company. New 
York, 1912. 

Knox, Philander C: Speeches in the Countries of the 
Caribbean. Washington, 1912. 

Kraus, Herbert: Die Monroedoktrin. Berlin, 1913. 

Jones, Chester Lloyd: Caribbean Interests of the United 
States. New York, 1916. 

Legation of Salvador in Washington: Before the Central 
American Court of Justice. The Republic of El 
Salvador vs. the Republic of Nicaragua. Complaint 
of the Republic of El Salvador. (Translated.) 
Washington, 1916. 



324 BIBLIOGRAPHY 

Legation of Costa Rica in Washington: Before the Cen- 
tral American Court of Justice. The Republic of 
Costa Rica vs. the Republic of Nicaragua. Com- 
plaint of Costa Rica. Washington, I916. 

: Same title. Decision of the Court in 

the Case of Costa Rica vs. Nicaragua. Washington, 
1916. 

Moncada, Jose Maria : Cosas de Centro America. Madrid, 
19O8. 

: The Social and Political Influence of the 

United States in Central America. New York, 19II. 

Oficina Internacional Centroamericana : Centro America. 
(Quarterly organ of the Bureau.) Published in 
Guatemala City. 

: El Arreglo de la Deuda Externa de 

Costa Rica. Guatemala, 191I. 

: Informes de las Conferencias Centro- 



americanas. Guatemala, 1908-13. 

Rojas Corrales, Ramon: El Tratado Chamorro-Weitzel 
ante Centro America y ante El Derecho Interna- 
cional. San Jose, 1914. 

World Peace Foundation: The New Panamericanism. 
Pt. III. (Pamphlet series.) The Central American 
League of Nations, Boston, February, 1917. 

Zelaya, Jose Santos: La Revolucion de Nicaragua y los 
Estados Unidos. Madrid, 191O. 

C. DESCRIPTIVE WORKS, TRAVELERS' ACCOUNTS, ETC. 
1. Central America in general. 

Bailey, John: Central America. London, 1850. 

Bates, H. W. : Central America, the West Indies, and 
South America. (In Stanford's Compendium of 
Geography and Travel.) London, 1878. 

Batres, Luis: Centro America. San Jose, 1879- 

Dunlap, Robert G. : Travels in Central America. Lon- 
don, 1847. 

Dunn, Henry: Guatemala, or the United Provinces of 
Central America in 1827-28. New York, 1828. 

Froebel, Julius. Seven Years' Travel in Central America, 
Northern Mexico, and the Far West of the United 
States. London, 1859- 

Keane, A. H.: Central and South America. London, 
1901. 



BIBLIOGRAPHY 325 

Morelet, Arthur: Travels in Central America. New 

York, 1871. 
Palmer, Frederick: Central America and its Problems. 

New York, ipiO. 
Perigny, Maurice de: Les Cinq Republiques de 

I'Amerique Centrale. Paris, 191 1. 
Sapper, Karl: Mittelamerikanische Reisen und Studien 

aus den Jahren 1888 bis 1900. Braunschweig, 

1902. 
: Das Noerdliche Mittel-Amerika. Braun- 
schweig, 1897. 
Squier, Ephraim G. : Notes on Central America. New 

York, 1855. 
: States of Central America. New York, 

1858. 
Stephens, John Lloyd: Incidents of Travel in Central 

America, Chiapas, and Yucatan. London, 1854. 

2. Guatemala. 

Brigham, W. T.: Guatemala, the Land of the Quetzal. 
New York, 1887. 

Crowe, F.: The Gospel in Central America. London, 
1850. 

Domville-Fife, C. W.: Guatemala and the Central States 
of America. London, 1910. 

Maudsley, A. C. and A. P. : Glimpse at Guatemala. Lon- 
don, 1899. 

Pepper, C. M.: Guatemala, the Country of the Future. 
Washington (Legation of Guatemala), 1906. 

Winter, N. O.: Guatemala and her People of Today. 
Boston, 1909. 

3. Salvaddt. 

Martin, Percy F.: Salvador of the Twentieth Century. 
London, 1911. 

4. Honduras. 

Belot, Gustave de: La Verite sur le Honduras. Paris, 

1869. 

Squier, Ephraim G.: Honduras, Descriptive, Historical, 
and Statistical. London, 1870. 

Wells, William V.: Explorations and Adventures in Hon- 
duras. New York, 1857. 

5. Nicaragua. 

Belt, Thomas: The Naturalist in Nicaragua. London, 
1874. (Now published in the Everyman's Library.) 



326 BIBLIOGRAPHY 

Government of Nicaragua. La Republica de Nicaragua. 

Managua, I9O6. 
Levy, Pablo; Nicaragua. Paris, 1873. 
Niederlein, Gustavo: The State of Nicaragua in the 

Greater Republic of Central America. Philadelphia 

(Philadelphia Commercial Museum), 1898. 
Pector, Desire: Etude Economique sur la Republique de 

Nicaragua. Neuchatel, 1893. 
Squier, Ephraim G. : Nicaragua, its People, Scenery, 

Monuments, and the Proposed Nicaragua Canal. 

New York, 1852. 
Stout, Peter F. : Nicaragua, Past, Present, and Future. 

Philadelphia, 1859- 

6. Costa Rica. 

Calvo, Joaquin Bernardo: The Republic of Costa Rica. 
Chicago and New York, 1890. 

Government of Costa Rica: Revista de Costa Rica en el 
Siglo XIX. San Jose, 1900. 

Molina, Felipe: Bosque jo de Costa Rica. New York, 
1851. 

Niederlein, Gustavo: The Republic of Costa Rica. Phila- 
delphia (Philadelphia Commercial Museum), 1898. 

7. Publications of the United States Department of Commerce, 

Bureau of Foreign and Domestic Commerce. 
Central America as an Export Field. (By Garrard 

Harris.) Special Agents' Series, no. 113. 1916. 
Trade Directory of Central America and the West Indies. 

Miscellaneous series, no. 22. 1915. 



INDEX 



Acajutla, port of, 115 

Accessory Transit Company, 83 f . 

Agriculture, 

methods of, 16; Costa Rica, 138, 
159, 163; Guatemala, 66flf; Hon- 
duras, 126, 129 flf., 132 flF.; Nica- 
ragua, 91 ff.; Salvador, 100, 106, 
112 

Aguardiente, 10, 15, 67, 246 

influence of, on people, 48, 66, 71; 
monopoly in, 285, 292 

Alajuela, 138, 144 

Alfaro, Prudencio, 217 

Alta Verapaz, 

labor conditions in, 59; products 
of, 70 

Amapala, 128, 

capture of, 208; Treaty of (1895), 
103, 170; Treaty of (1907), 
209 

American International Corporation, 
281 

American investments in Central 
America. See Capital 

American Phalanx, 82 f. 

Amusements, 4, 10 

Araujo, Manuel Enrique, 103 

Arbitration. See Central American 
Court of Justice 

Arce, Manuel Jos#, 29 

Army, 42 f., 188 f., 196, 

Costa Rica, 154; Guatemala, 57; 
Nicaragua, 73 f.; Salvador, 108 f. 

Ayuntamientos. See Government, Mu- 
nicipal 

B 

Balsam of Peru, 

export of, 112 f., 273 

Bananas, 20, 133 f., 204, 

blight, 270; export trade in, 268 ff.; 
Costa Rica, 138, 160 f.; Guate- 
mala, 70; Honduras, 120, 1331; 
Nicaragua, 97 

Banks. See Finance 

Barillas, Manuel Lisandro, 52 

Barrios, Gerardo, 102 

Barrios, Jos6 Maria Reyna, 52 

Barrios, Justo Rufino, 52, 102, 123, 
171 f. 



Beneficios, 18, 266 f. 
Bertrand, Francisco, 124 
Blaine, Secretary, policy of, 181 f. 
Blanco, General, 145 f. 
Bluefields, 96 f., 

blockade of, 230; rerolution at 
(1909), 227 ff. 
BogrSn, Luis, 123 

Bonilla, Manuel, 123 f.; 172, 207 f. 
Bonilla, Policarpo, 123 
Brown Brothers and Company, 
loans to Nicaragua, 235 ff., 259 ff., 
292 f. 
Buchanan, President, 
restoration of Central American 
Union favored by, 181 
Buchanan, William 1., 210 
Bureau, Central American. See C«H- 
tral American Bureau 



Cabafias, Trinidad, 122 

Cabinets. See Government 

Cabrera, Manuel Estrada. See Et- 
trada Cabrera, Manuel 

Cacao, export of, 17, 92, 273 

Cannon, Lee Roy, execution of, 
228 f. 

Capital, foreign, 

influence of, 98, 183, 267 f.; in 
Central America, 281 f., 288 f.; 
in Honduras, 127, 132; in Nica- 
ragua, 235 ff., 259 ff. See also 
Finance 

Carazo, Evaristo, 87 f, 

Caribbean Coast, 

importance of, 20, 70; in Costa 
Rica, 1601; in Honduras, 132 ff.; 
in Nicaragua, 95 ff. 

Carillo, Braulio, 141, 1441 

Carrera, Rafael, 32, 51, 101 f., 122, 
168, 198 

Cartago, 1381, 144 

Castellon, Francisco, 81 

Castro, Jos4 Maria, 146 

Catholic Church, influence of, 13, 131,^ 
196, 198 

Cattle, 161, 67, 78, 92, 

export of, 273; Costa Rica, 142; 
Honduras, 120, 126 f., 135; Sal- 
vador, 112 



327 



328 



INDEX 



Central America, 

progress retarded in, 14 f., 185 ff.; 
export trade of, 265 ff . ; import 
trade of, 275 ff. ; revenue, sources 
of, 284 f . ; expenditures of each 
republic (1913), 286 f.; foreign 
debts, origin of, 288 f . ; curren- 
cies, depreciation of, 296 ff. ; for- 
eign capital, need of, 302; invest- 
ments, opportunities for, 303 f . ; 
United States, opposition to, 
306 f . ; financial assistance, need 
of, 311 ff. 

Central American Bureau, 

San Jose Conference establishes 
(1906), 206 f.; Washington Con- 
ference establishes (1907), 212; 
convention establishing, 215; 
vs^ork of, 225 f. 

Central American Court ox Justice, 
213 ff. 
case of Nicaragua and Honduras 
vs. Guatemala and Salvador, 
2181; work of, 221 ff,; case of 
Nicaragua and United States 
Canal Treaty, 254 ff. 

Central American Federal Republic. 
See Central American Union. 

Central American Federation. See 
Central Americaii Union 

Central American Public Works Com- 
pany, 290 

Central American Union, 28 ff., 144 ; 
need of, 164 f.; advantages of, 
179 ff.; difficult to form, 171 f., 
174 ff.; attempts to renew, 102, 
168ff.; Union of 1842, 168; 
Union of 1849, 169; Union of 
1895, 170 

Centro Americo, 226 

Cerna, Vicente, 52 

Chalchuapa, battle of (1885), 105, 
172 

Chamorro, Emiliano, 231 f., 234, 243, 
245, 250 ff. 

Chamorro, Frutos, 169 

Chinandega, treaty of (1842), 168 f. 

Christmas, General Lee, 218 

Cities. See Government, munici- 
pal 

Civil Wars. See Revolutions 

Claims. See Investments, foreign 

Clayton-Bulwer Treaty, 82, 96 

Climate, 

Costa Rica, 138 f.; Guatemala, 
67 f . ; Nicaragua, 92 ; Salvador, 
100 

Coban, 70 

Cochineal, export of, 17 

Cocoanuts, export of, 273 



Coffee, 5, 17 ff., 274 f. 

cultivation, methods of, 265 ff . ; ex- 
port of, 266 ff., 275; Costa Rica, 
142, 144, 160 ff.; Guatemala, 
66 f.; Honduras, 136; Nicaragua, 
93; Salvador, 100, 112, 115 

Colonos, 59 

Commerce, 265 ff., 

development retarded, 14 f,; foreign 
control of, 21, 276 ff.; exports, 
17, 265 ff.; imports, 275 f.; 
United States trade with Central 
America, 276 fl. ; Costa Rica, 
159 ff., 274; Guatemala, 67 f., 
274; Honduras, 135 f., 274; 
Nicaragua, 92 ff., 274; Salvador, 
114 ff., 274 

Communication, means of. See Trans- 
portation 

Concessions, 22, 313 ff., 
Honduras, 134 f.; Nicaragua, 89 f., 
97. See also Investments, foreign 

Conferences, 176, 
U. S. S. Marblehead (1906), 
206; San Jos6 (1906), 206 ff.; 
Washington Conference, 216, 
220 f.; annual, 216, 225 

Congress, See Government. 

Conservatives, See Political Parties 

Contract labor system. See Labor 

Contreras brothers, 192 

Corinto, 87, 244 f . 

Corn, 112 

Corporations, foreign, 

influence of, 22, 83 f., 132, 134, 
202, 269 ff, ; need of government 
control of, 313 ff. See also 
Brown Brothers and Co,; Ethel- 
burga Syndicate; Seligman, J, 
& W. and Co,; Finance 

Corral, General, 81 f. 

Costa Rica, 

agriculture, 138, 159 f., 162 f.; area 
and population, 1, 138 ff., 162 f.; 
army, 154; bananas, 138, 160 f., 
268 ff".; cattle, 142; coffee, 142, 
144, 160 ff., 275; commerce, 159 ff., 
266, 268, 274 f., 277 f.; Court of 
Justice, decisions of, 224, 253 ff.; 
education, 147, 158 f.; finance, 
285 ff., 290 ff., 301; government, 
143 f., 147 ff., 154 ff., 159; his- 
tory, 144 ff'.; labor, 139 ff., 163; 
land, ownership of, 141 f,; peace, 
internal, 148 fl'., 194, 200; poli- 
tics, 148 ff.; transportation, fa- 
cilities of, 157, 160 f., 291; 
United Fruit Co., 160 f. 

Court of Justice, See Central Ameri- 
can Court of Justice 



INDEX 



329 



Courts, corruption of, 36, 46 ff. 

Creel, Senor, 210 

Creoles, 3 ff ., 25, 56, 78, 191 f. 

Crops. See Agriculture 

Cuadra family, 232, 

Dr. Carlos Cuadra Pasos, 250 flf. 

Currency systems, 296 ff ., 

Costa Rica, 301 ; Guatemala, 54, 
297 ff.; Honduras, 300; Nica- 
ragua, 236 ff., 248 f., 263, 299; 
Salvador, 300 f. 

Customs, collection of, 238 f., 312 



D 



Ddvila, Miguel, 123 f., 172, 208 ff., 

217 
Dawson, Thomas C, 233 
Dawson agreement, The, 233 f ., 243 
Delgado, Father, 29 
Diaz, Adolfo, 232, 234, 243 ff. 
Diaz, Porfirio, 173, 206, 210, 229 
Diseases. See Sanitation 
Duenas, Francisco, 102 

E 

East Coast. See Caribbean Coast 

Education, 11, 199, 317 f., 

Costa Rica, 147, 158 f . ; Guatemala, 
55, 61; Honduras, 131; Nica- 
ragua, 89; Salvador, 110 f. 

Elections, 30 f ., 34 f ., 

Costa Rica, 148 ff.; Guatemala, 
55 f.; Nicaragua, 74, 245, 249 ff. 

El Triunfo, 116 

Emery claim, 228 

Encomiendas. See Repartimientos 

Escalon, Jos6 Pedro, 103 

Esquivel, Ascension, 147 

Estrada, Juan J., 227, 230 f ., 234 f . 

Estrada Cabrera, Manuel, 53, 74, 206, 
297 

Ethelburga Syndicate, 237 f., 240, 
292 f. 

European War, effect of, 115, 135, 
247 ff., 274 f., 279, 281 ff., 290, 
296, 298 ff. 

Exchange, rates of, 296, 298 ff. 

Export trade. See Commerce 

Ezeta brothers, 102 



Fernandez, Mauro, 147 
Fernandez, Prospero, 146 
Ferrer, Francisco, 122 
Fiallos, Sefior, 173 
Figueroa, Fernando, 103, 209 
Filibusters and filibustering, 81 ff., 
217 f. 



Filisola, General, 28 

Finance, 21 f., 235 ff., 259 ff., 279 ff., 
284 ff. See also Capital Corpora- 
tion Investment Loans 

FonsQca, Casto, 80 

Fonseca, Gulf of, 115, 117, 119, 
naval base on, 252 ff . 

Fruit trade. See Commerce 



G 



Gainza, Governor-general of Guate- 
mala (1821), 24, 80 

Germany, 

Central American commerce with, 
274 ff., 277 f. 

Gold, 120, 272 

Gonzalez, Alfredo, 148 

Gonzalez, Santiago, 102 

Gonzalez Viquez, Cleto. See Vlquez, 
Cleto Gonzalez 

Government, 25, 41 f., 

Executive, powers of, 33 ff., 37 
39 ff., 286 f.; Cabinets, 37; Legis 
latures, 36; Judiciary, 36 f. 
46 ff.. Ill, 155 f.; Costa Rica 
143, 147 ff., 154 ff.; Guatemala 
53 ff.; Honduras, 124 f.; Nica 
ragua, 73ft'.; Salvador, 105 
107 ff. See also Political Parties 
Politics 

Government, municipal, 27, 37 f ., 66, 
156 

Grace and Company, 281 

Graft. See Politics 

Granada, 

Leon, rivalry with, 77 ff . ; capture 
of (1855), 81 

Granados, Miguel Garcia, 52 

Great Britain, 

bondholders in Guatemala sup- 
ported by, 289; bondholders in 
Honduras supported by, 294; 
bondholders in Nicaragua sup- 
ported by, 240; Central American 
commerce with, 274 f., 277 ff., 
282; protectorate on Mosquito 
Coast, 95 f., 168 f. 

Greytown, 82, 95 f. 

Groce, Leonard, execution of, 228 f . 

Guardia, General Tomas, 33, 146, 291 

Guardia Civil, 109 

Guardiola, Santos, 122 

Guatemala, 

agriculture, 66 ff.; area and popu- 
lation, 1, 50, 57 ff., 67, 70, 198; 
army, 57 f., bananas, 70, 268 f.; 
cattle, 67; Central American 
Union and, 168, 178; coffee, 
66 ff., 266 ff., 275; commerce. 



330 



INDEX 



67 f., 274, 277 f.; education, 55, 
61; finance, 54, 285 f., 2881, 
297 f . ; government, 53 if. ; labor, 
58 ff., 62 ff . ; land, ownership of, 
64 ; politics, 54 f . ; transporta- 
tion, facilities of, 68flf. ; United 
Fruit Co., 69 f . 
Gutierrez, Rafael, 102 f. 



H 



Habilitadores, 62, 64 
Ham, Colonel Clifford D., 238 f. 
Health. See Sanitation 
Heredia, 138, 144 
Herrera, Dionisio de, 80 
Highways. See Transportation 
Honduras, 
agriculture, 119 f., 126, 129 ff., 

132 f.; area and population, 1, 
120, 129 f., 133; bananas, 120, 
133, 268; capital, foreign, 127 f., 
132, 134 f.; Caribbean Coast, im- 
portance of, 132 ff.; Central 
American Union and, 167 f.; 
cattle, 120, 126 f., 135, 273; cof- 
fee, 136, 266, 275; commerce, 

133 ff., 273 f., 277; economic de- 
velopment of, retarded, 126 ff.; 
education, 131; finance, 285 f., 
288, 293 ff., 300; foreign rela- 
tions, 121, 123, 168 f., 172, 207 f.; 
government, 124 f.; living, stan- 
dards of, 129 ff.; mines, 120, 
127; transportation, facilities of, 
127 f., 1341, 293; United Fruit 
Co., 134 f.; Washington conveH- 
tions, 211 1 



Immigration, foreign, 21 
Import trade. See Commerce 
Indians, 2, 58, 178, 

Costa Rica, 138 ff. ; Guatemala, 

57 ff., 64, 198; Honduras, 120; 

Nicaragua, 72, 93 f . ; Salvador, 

100 
Indigo, 17, 92, 273 
Industries. See Manufacturing 
International Health Commission. 

See Sanitation 
Investments, foreign, 21 ff., 265 ff., 

271, 3011, 311 ff. See also 

Finance 
Irlas, Dr. Julian, 251 f. 
Iturbide, Augustin, 28 f . 



Jer€z, Maximo, 81 f., 85 f. 

Jimenez, Jesfis, 146 

Jim6nez, Ricardo, 148 

Jinotega, 93 

Joint Claims Commission. See Nica- 

raguan Joint Claims Commission 
Jornaleros, 69 ff. 
Judiciary. See Government 
Junta Consultiva, 24 
Justice, Central American Court of. 

See Central American Court of 

Justice 

K 

Keith, Minor C, 160, 269, 291, 

interests, 271 
Knox, Secretary, note of, to Zelaya, 
2281 



Labor, 71, 101, 

Costa Rica, 1391, 163; Guatemala, 

59 ff., 62 ff.; Nicaragua, 93 ff.; 

Salvador, 114 
La Ceiba, 133 
Ladinos, 6, 57, 72, 195 
La Libertad, 116 
Land, ownership of, 3, 6, 64, 931, 

141 1, 267 f. 
La Union, 115, 117 
Legislatures. See Government 
Leiva, Ponciano, 123 
Lempa River, 100, 115 
Leon, 

Granada, rivalry with, 77 ff. 
Ley de Trabajadores (1894), 59 ff. 
Liberals. See Political Parties 
Living, conditions of, 4 ff., 8 ff., 113 f., 

129 ff., 161 ff. 
Loans, foreign, 235 ff., 241 ff., 294. 

See also Finance 
Local Government. /Sfee Government, 

municipal 
Localismo, 43-1, "73, 761, 1961 
Lumber, 17, 70, 135, 273 

M 

Madriz, Jos6, 229 f . 
Mahogany. See Lumber 
Malespin, Francisco, 101 1 
Managua, 80, 86 ff. 
Mandamientos, 59 
Manufacturing, 15, 114 
Marblehead (U. S. S.), 206 
Martinez, TomSs, 85 f . 
Matagalpa, 92 ff., 236 



INDEX 



331 



Medina, Jos6 Maria, 122 

Mel^ndez, Don Carlos, 103 

Mena, General Luis, 231, 234, 
242 flf. 

Men4ndez, Francisco, 102 

Mestizos. See Ladinos 

Metals, precious. See Mines 

Mexico, 28, 123, 206 flf., 218, 229. 
See also Dfaz, Porfirio 

Mines, 120, 126 f., 272 f. 

Missionaries, influence of, 13 

Moncada, General Jos^ Maria, 231, 
234 

Monroe Doctrine, 204 ff., 302, 
304 f. 

Montealegre, Jos6 Maria, 145 

Mora, Juan, 144 

Mora, Juan Rafael, 145, 181 

MorazSn, Francisco, 29 f., 80, 101, 
122, 145, 167 

Morgan, J. P. & Co., 294 

Mosquito Coast, 95 ff., 169 

Municipal government. See Govern- 
ment, municipal 

Mufioz, Trinidad, 80 



N 



Namasigne, battle of (1907), 208 

National Constituent Assembly, 28 ff ., 
166 

Negroes. See Population 

New York and Honduras Rosario 
Mining Co., 127 

Nicaragua, 

agriculture, 91 ff.; area and popu- 
lation, 1, 72, 76, 93 f.; army, 
73 f,; bananas, 97, 268; canal 
route in, 75 f., 252, 254 ff.; capi- 
tal, foreign, 89 f., 97, 235 ff., 
259 ff.; Caribbean Coast, 95 ff.; 
cattle, 78, 92, 273; Central 
American Union and, 167 f.; 
Claims Commission, 240 f . ; com- 
merce, 92 f., 238, 274, 277; cof- 
fee, 93, 266, 275; Court of Jus- 
tice, decision of, 223 f.; educa- 
tion, 89; finance, 232 ff., 239 ff., 
246 ff., 248 f., 259 ff., 263, 2S5 f., 
288, 292, 299 f . ; foreign influ- 
ence in, 95 ff., 169; government, 
73; history, 81 ff., 89 ff.; labor, 
93 ff.; politics, 74, 76 ff., 89, 245, 
249 ff. ; transportation, facilities 
of, 97 f., 237, 246, 261, 292; 
United States, intervention of, 
182, 228 ff., 244, 306 

Nicaragua, Lake, 75 

Nicaraguan Joint Claims Commis- 
sion, 240 f . 



Oficina Internacional Centroameri- 
cana. See Central American 
Bureau 

P 

Pan American Financial Conference 
(1915), 294 f. 

Panama Canal, 161, 204 

Paper money. See Currency 

Pasos, Dr. Carlos Cuadra, 250 ff. 

Peonage. See Labor 

Personalismo, 43 f ., 76 f., 196 f. 

Peten, 70 

Police, 53, 108 f., 157 

Political Parties, 26, 29, 31 ff., 43 ff., 
149 ff., 165, 
Conservatives, 29, 32 f., 167 f.; 
Guatemala, 51 ff.; Honduras, 
122; Nicaragua, 78 ff., 85 ff., 
169 f., 231, 233, 250; Salvador, 
102 f.. 
Liberals, 29, 32 f., 167 f.; Guate- 
mala, 50 ff.; Honduras, 122; 
Nicaragua, 78, 85 ff., 228 ff., 233, 
250 f., 260; Salvador, 101 f. 

Politics, corruption in, 45 ff., 186 ff., 
286 ff., 291 ff., 
Costa Rica, 159; Guatemala, 54; 
Honduras, 125; Nicaragua, 76 ff., 
89; Salvador, lllf. ; foreign in- 
fluence on, 132, 135, 161, 200 ff., 
227 314f. 

Population, 2,' 60, 72, 100, 120, 138 ff,, 
Negro, 20, 120 f., 133, 160. See 
also Indians 

Ports, 68 f., 87, 97, 115 f., 128 f., 132, 
160 f. See also Transportation 

President, power of. See Government 

Press, influence of, 48, 149 f. 

Protectorates. See Great Britain, 
United States 

Puerto Barrios, 68 f, 

Puerto Cortez, 133 

Puerto Limon, 160 

Puntarenas, 160 f. 



R 



Railways. See Transportation 
Regalado, TomSs, 103 
Religion. See Catholic Church 
Repartimientos, 7, 58, 139 f. 
Revolutions, causes of, 49, 185 ff. 
Rivas, Patricio, 81 
Roads. See Transportation 
Rockefeller Foundation. See Sanita- 
tion 
Rodriguez, Jos6 Joaquin, 147 



332 



INDEX 



Roosevelt, Theodore, 173, 205 ff., 210 

Root, Elihu, 210 

Rum. See Aguardiente 

S 

Sacasa, Roberto, 88 

Salazar, General, 145 f. 

Salvador, 
agriculture, 100, 106, 112; area 
and population, 1, 99 f., 113 f.; 
army, 108 f.; cattle, 112; Central 
American Union and, 167 f. ; cof- 
fee, 100, 112, 115, 266, 275; com- 
merce, 1141, 274, 277; Court of 
Justice, decision of, 224; educa- 
tion, 1101; finance, 2851, 288, 
290, 300 f.; foreign relations, 
104 ff., 117; Guatemala and, 29; 
government, 107 ff.; labor, 114; 
manufactures, 114; Nicaraguan 
Canal Treaty, protest against, 
253 flf . ; peace, internal, 194 ; poli- 
tics, 105 1, 1111; transporta- 
tion, facilities of, 109, 115 flf., 
290 

Sanitation, 9, 157 f. 

San Jose, 138, 144, 160, 
conference at, 206 f. 

San Salvador, 99, 115 f. 

Santa Ana, 102, 115 1 

San Vicente, 115 

Schools. See Education 

Seligman, J. & W. and Co., 235, 242, 
246 ff ., 259 ff ., 292 ff. 

Sierra, General Terencio, 123, 209 

Silver, 127, 272 f. 

Social conditions, 5, 10, 12, 22 f. 

Sonsonate, 115 

Soto, Bernardo, 146 

Soto, Marco Aurelio, 123 

Spain, influence of colonial system 
of, 14 

Spoils system. See Politics 

Steamship lines, 19, 69, 97, 116, 132, 
269. See also Transportation 

Sugar, 112 

T 

Taft, William H., 217, 228 

Tegucigalpa, 19, 122, 128 f., 208 

Tinoco, Federico, 148 

Trade. See Commerce 

Transportation, 19, 177, 

Costa Rica, 157, 160, 291; Guate- 
mala, 68 ff.; Honduras, 127 f., 
134 f., 293; Nicaragua, 97, 237, 
246, 261, 292; Salvador, 109, 
115 ff., 290. See also Steamship 
lines 



U 



Union, Central American. See Cen- 
tral American Union 

United Fruit Company, 19 ff., 269 ff., 
281 
Costa Rica, 160 f.; Guatemala, 
69 1; Honduras, 1341 

United States, 

Central American Union, 171, 
181 ff.; commerce with Central 
America, 269, 274 ff., 279 ff.; 
commercial and financial inter- 
ests of, 180 ff., 204 1, 303 ff.; 
financial assistance of, needed in 
Central America, 279 f., 302; 
Honduras, intervention in, 123, 
294; influence of, in Central 
America, 203, 220 f . ; intervention 
in Central America, 304 ff . ; in- 
tervention, results of, 307 ff. ; 
Mexico and, intervention of, 
207 ff. ; Monroe Doctrine, main- 
tenance of, 205 f . ; Mosquito 
Coast, British control of, 95; 
Nicaragua, relations with, 98, 
182, 228 ff., 233 f., 235 ff., 244, 
250, 253 f., 258; relations with 
Central America, 105, 171; Sal- 
vador, relations with, 117; trade, 
opportunities for, 282 f . ; trade 
retarded, 279; Walker, attitude 
toward, 82 f. 



Valle, Andres, 102 
VSsquez, Domingo, 123 
Vlquez, Cleto Gonzalez, 148 

W 

Wages, 10, 299. See also Labor 
Walker, William, 81 ff'., 85 f., 145, 

189 
Washington Conference (1907), 123, 

173, 210 ff., 2161, 226, 305; 

conventions of, 105, 176, 211 ff., 

2201, 315 

Y 

Yglesias, Rafael, 147, 301 

Z 

Zacapa, 116 

Zaldlvar, Rafael, 102, 172 

Zelaya, Jose Santos, 88 ff., 96 f., 103, 

1231, 170, 172, 193, 207 ff., 

217 ft"., 227 ff., 299, 306 
Zeledon, Benjamin, 243 f. 



